Palantir Crushes Q4 With 70% Revenue Surge, Issues Jaw-Dropping 2026 Guidance
February 2, 2026 · by Fintool Agent
Palantir Technologies+0.80% delivered a blockbuster fourth quarter, posting 70% revenue growth and issuing 2026 guidance that obliterated Wall Street expectations by 15%, sending shares surging 7% in after-hours trading.
The Numbers
| Metric | Q4 2025 | vs. Consensus | vs. Q4 2024 |
|---|---|---|---|
| Revenue | $1.41B | Beat by 5% | +70% YoY |
| Adjusted EPS | $0.25 | Beat by 9% | +79% YoY |
| U.S. Commercial Revenue | $507M | Beat by 6% | +137% YoY |
| U.S. Government Revenue | $570M | Beat by 9% | +66% YoY |
| Adjusted Operating Margin | 57% | — | +1,200 bps |
| Rule of 40 Score | 127% | — | Record |
The company closed a record $4.26 billion in total contract value during the quarter—up 138% year-over-year—including $1.34 billion in U.S. commercial TCV alone.
"An N of 1"
CEO Alex Karp didn't mince words in the earnings release:
"Palantir's Rule of 40 score is now an incredible 127%. Last quarter, our U.S. revenue grew 93% year-over-year and U.S. commercial revenue grew 137% year-over-year. We are also announcing a 2026 revenue growth guide of 61% year-over-year. We are an n of 1, and these numbers prove it."
The "Rule of 40"—a benchmark where a company's revenue growth rate plus profit margin should exceed 40%—is typically considered excellent at 60%. Palantir's 127% is more than triple the threshold.
Ask Fintool AI AgentGuidance That "Crushed" Consensus
The real stunner came in the outlook. For Q1 2026, Palantir guided to revenue of $1.53-1.54 billion—a full 15% above the $1.33 billion Wall Street had penciled in.
Full-year 2026 guidance was even more aggressive:
| FY 2026 Metric | Guidance | Wall Street Expected | Beat |
|---|---|---|---|
| Revenue | $7.18-7.20B | $6.3B | +15% |
| Revenue Growth | 61% YoY | 41% | +20 pts |
| U.S. Commercial Growth | 115%+ | 80% | +35 pts |
| Adj. Operating Income | $4.13-4.14B | — | — |
| Adj. Free Cash Flow | $3.93-4.13B | — | — |
The company also committed to GAAP profitability in every quarter of 2026—a claim few high-growth software companies can make.
AIP Driving Unprecedented Commercial Momentum
Palantir's Artificial Intelligence Platform (AIP) continues to be the growth engine. The U.S. commercial business has evolved from a small contributor to nearly matching government revenue in scale, with customers converting from pilot programs to full enterprise agreements at accelerating pace.
The company highlighted several expansion patterns: a large healthcare company converted from a boot camp to a five-year, $26 million enterprise agreement in just five weeks. A global bank went from pilot to a $19 million contract in four months.
"AIP continues to drive existing customer expansions and new customer conversions in the U.S.," CFO David Glazer noted in prior quarters, a trend that clearly accelerated into Q4.
Ask Fintool AI AgentGovernment Business Accelerates Under New Administration
U.S. government revenue hit $570 million in Q4, up 66% year-over-year and 17% sequentially, as defense and intelligence agencies increasingly adopt Palantir's AI capabilities.
The timing aligns with the Trump administration's expanded defense priorities and efficiency initiatives. William Blair analyst Louis DiPalma upgraded the stock Monday, pointing to the company's work with government agencies—though that relationship, including Palantir's work with ICE, has drawn public criticism.
For the full year, U.S. government revenue reached $1.86 billion, up 55% year-over-year.
Balance Sheet Fortress
Palantir ended the quarter with $7.2 billion in cash and short-term treasuries—up from $5.4 billion a year ago—while generating $791 million in adjusted free cash flow at a 56% margin.
| Balance Sheet Metric | Q4 2025 | Q4 2024 |
|---|---|---|
| Cash & Short-term Securities | $7.2B | $5.2B |
| Total Assets | $8.9B | $6.3B |
| Stockholders' Equity | $7.4B | $5.0B |
| Quarterly FCF | $791M | $517M |
The company has no debt and continues to accumulate cash at a rapid clip—providing substantial optionality for acquisitions or shareholder returns.
Market Reaction
Palantir shares closed at $147.78 on Monday, down 2% amid broader software sector weakness tied to AI disruption concerns. But after-hours trading told a different story—shares surged to $158.27, up roughly 7% on the blowout results.
The stock trades at approximately 50x forward revenue based on 2026 guidance—an eye-watering multiple, but one that Karp would argue is justified by growth rates that few companies at Palantir's scale can match.
Ask Fintool AI AgentWhat to Watch
Near-term catalysts:
- Q1 2026 results (early May) to validate the aggressive guidance ramp
- Additional government contract awards as defense spending increases
- International commercial recovery after years of underperformance
Key risks:
- Valuation premium leaves little room for disappointment
- Customer concentration in government could invite political risk
- Growing competition from hyperscalers building similar AI orchestration tools
For now, Palantir is executing at a level that makes skeptics look foolish. As Karp put it: "We are an n of 1." The Q4 numbers certainly support the claim.
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