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    Palantir Technologies (PLTR)

    Q3 2024 Earnings Summary

    Reported on Feb 4, 2025 (After Market Close)
    Pre-Earnings Price$41.41Last close (Nov 4, 2024)
    Post-Earnings Price$47.86Open (Nov 5, 2024)
    Price Change
    $6.45(+15.58%)
    • Palantir achieved exceptional growth in the U.S. market, with 44% year-over-year revenue growth in the U.S.. This demonstrates strong adoption of its products in the most valuable market.
    • The company's AI Platform (AIP) is rapidly gaining traction, with customers quickly moving from initial engagements to significant deals, indicating Palantir's leading position in the AI revolution and the scalability of its products.
    • Palantir is combining high growth with high margins, maintaining a rule of 68 (combined growth rate and adjusted operating margin), which is exceptional among peers and showcases the strength of its business model and world-class products.
    • Heavy reliance on U.S. government contracts poses a concentration risk; with U.S. government revenue growing 40% year-over-year and 15% sequentially, any changes in government spending could significantly impact Palantir's revenue.
    • The company's focus on a smaller number of large clients rather than scaling to a broader customer base may limit future growth opportunities and hinder market expansion.
    • Potential increases in stock-based compensation expenses due to accelerated vesting from a rising stock price could negatively affect profitability.
    MetricPeriodGuidanceActualPerformance
    Revenue
    Q3 2024
    Between $697 million and $701 million
    $725.5 million
    Beat
    GAAP Operating Income
    Q3 2024
    Expected in each quarter of 2024
    $113.14 million
    Met
    GAAP Net Income
    Q3 2024
    Expected in each quarter of 2024
    $143.525 million
    Met
    TopicCurrent PeriodPrevious MentionsTrend

    Reliance on U.S. Government

    Still strong; U.S. government revenue grew 40% year-over-year and 15% sequentially, driven by AI and defense contracts.

    Q2: 24% YoY growth; major contracts from DoD. Q1: 12% YoY growth; TITAN contract win. Q4: Muted results but expected reacceleration.

    Consistently mentioned

    U.S. Commercial Growth

    Robust; 54% YoY growth and 13% sequentially, with 77% YoY increase in customer count.

    Q2: 55% YoY growth ; Q1: 40% YoY ; Q4: 70% YoY.

    Continues strong momentum

    AI and Advanced Analytics

    Key driver; emphasizes production-ready AI and applications, highlighting workflows that reduce costs and time (e.g., underwriting down from 2 weeks to 3 hours).

    Q2: Focus on converting prototypes to production ; Q1: AIP adoption fueling revenue ; Q4: AIP central to customer expansions.

    Consistent emphasis

    High Operating Margin and Growth

    Achieved 38% adjusted operating margin, with a Rule of 68 reflecting revenue growth plus high margins.

    Q2: 37% margin, Rule of 64 ; Q1: 36% margin, Rule of 57 ; Q4: 34% margin, Rule of 54.

    Ongoing improvements

    Geopolitical Tensions

    Not specifically mentioned for Q3 in the provided documents.

    Q4: Cited as both an opportunity and risk, driven by conflicts (e.g., Ukraine, Israel).

    No direct Q3 mention

    Boot Camps

    Mentioned as driving rapid conversions (e.g., 7-figure deals in under 2 months).

    Q2: Key go-to-market tool (16-day prototype-to-production) ; Q1: Deals closed within days post-Boot Camp ; Q4: Over 560 Boot Camps across 465 orgs.

    Still used, slightly less emphasis

    Warp Speed

    Referenced under reindustrialization efforts, focusing on U.S. manufacturing modernization.

    Introduced in Q2 as a manufacturing OS (integrating AI and Ontology). Not mentioned in Q1 or Q4.

    New in Q2, noted again in Q3

    AI Platform (AIP)

    Central focus with examples of automating workflows (reducing 2-week tasks to 3 hours) and scaling defense initiatives.

    Q2: Drove expansions with Tampa General, Kinder Morgan ; Q1: Key growth driver in U.S. commercial ; Q4: Boosted TCV and closed multiple large deals.

    Increasing significance

    Focus on Large Clients

    Highlighted as a strategic approach (fewer, bigger partners) to maintain high margins and avoid commoditization.

    Not mentioned in Q2, Q1, or Q4 documents.

    Emerges in Q3

    1. U.S. Commercial Growth
      Q: Surprised by quick boot camp conversions to mega deals?
      A: Management reported impressive 44% year-over-year growth in U.S. business and 54% growth in U.S. commercial sector. Customers are rapidly moving from boot camps to seven-figure annual contract value deals within less than two months , highlighting the effectiveness of Palantir's process and strong position in the AI revolution.

    2. U.S. Government Partnerships
      Q: What's driving the 40% increase in U.S. government revenue and new partnerships?
      A: The acceleration in U.S. government revenue, up approximately 40% , is driven by the Mission Manager platform, utilizing software infrastructure like Rubix and Apollo to help partners reach revenue faster. By opening parts of their products to partners and allowing them to work directly with government data, Palantir has reduced friction and boosted collaboration.

    3. Strategic Commercial Contracts
      Q: Update on strategic commercial contracts and deal value?
      A: Strategic commercial contracts now represent a tiny part of the business, about 1% of revenue in Q3. The program ended three years ago, making it largely irrelevant to current operations.

    4. Support for Individual Investors
      Q: Any message for individual investors?
      A: CEO Alex Karp expressed gratitude, emphasizing that they are "in it together" and that individual investors' support is crucial to Palantir's success.

    Research analysts covering Palantir Technologies.