Q4 2023 Earnings Summary
- Palantir is experiencing an acceleration in AIP customer engagement, with expectations for continued growth into 2024.
- High demand for AIP boot camps is driving the company to scale and rebuild to meet this overwhelming interest.
- Strong investor support and commitment to empowering the West and its allies highlight Palantir's strategic positioning and mission-driven focus.
- Despite high demand for AIP, Palantir's customer engagement is still in the early stages of rollout, which may lead to delays in revenue realization.
- The company is rebuilding its operations to handle increased demand, indicating challenges in scaling, which could result in operational disruptions.
- Palantir is reallocating employees from Europe to America, suggesting potential issues in international markets and increasing reliance on U.S. commercial growth, leading to concentration risk.
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Acceleration in AIP Customer Engagement
Q: Are you seeing acceleration in AIP customer engagement into 2024?
A: Management confirms they are absolutely seeing an acceleration in AIP customer engagement. They note that while it's still early in the rollout, customer adoption is increasing rapidly. Their AIP boot camps are oversubscribed, likened to a "rock concert," indicating strong demand. They are rebuilding the company to meet this demand, hiring more staff in America, and emphasizing the need to scale appropriately. -
Advantage Over Traditional Primes
Q: How large is Palantir's advantage in selling software to the DoD compared to traditional primes?
A: Management emphasizes that having focused on software for two decades gives Palantir a significant advantage over traditional primes, who are now responding to software needs. Their software evolves faster than procurement can procure it, ensuring they always have advanced solutions ready for the DoD's needs. -
Changes in DoD Procurement Approach
Q: How large is the change needed in the DoD's approach to awarding software contracts?
A: Management acknowledges that much has changed in the DoD's ability to procure software compared to two decades ago, but more changes are still needed. They believe the department recognizes this and is working on it but stress that acknowledging the progress is important. -
Scaling to Meet Demand
Q: Are you experiencing challenges in dealing with the demand for AIP?
A: Management discusses the overwhelming demand for AIP, stating they can't do enough conferences and their AIP boot camps are oversubscribed. They compare the interest to a "rock concert" and are focusing on scaling the company appropriately to handle this "bonanza" of interest. -
Investor Support and Company Mission
Q: Is there anything you'd like to say to shareholders before ending the call?
A: Management expresses gratitude to investors, stating they are fighting for the West and its allies to be stronger. They emphasize the importance of delivering the best products to allies, supporting U.S. commercial strength, and appreciate investor support, which motivates them.
Research analysts covering Palantir Technologies.