Palantir Surpasses $1 Billion in Q3 Revenue, Boosts Full-Year Guidance, and Doubles Market Value

Palantir surpassed Wall Street expectations on Monday, reporting quarterly revenues exceeding $1 billion for the first time and raising its full-year guidance. Shares rose more than 5% in response.

The artificial intelligence software provider’s revenues increased by 48% during the period, with analysts initially expecting the $1 billion mark to be reached in the fourth quarter of this year. In a letter to shareholders, CEO Alex Karp attributed the growth to years of investment and what he described as a decrease in skepticism from some parties.

The company also raised its full-year revenue outlook. For the full year, Palantir now anticipates revenues ranging between $4.142 billion and $4.150 billion, up from previous guidance of $3.89 billion to $3.90 billion.

For the third quarter, Palantir forecasts revenues between $1.083 billion and $1.087 billion, surpassing an analyst estimate of $983 million. The company also revised its operating income and full-year free cash flow guidance.

U.S. revenues for the software analytics company increased by 68% year over year to $733 million, while U.S. commercial revenues nearly doubled to $306 million.

Palantir’s growth has been bolstered by President Trump’s government efficiency campaign, which included layoffs and contract cuts. The company’s U.S. government revenues increased by 53% from the previous year to $426 million.

In his letter to shareholders, Karp cited the convergence of language models, necessary chips, and the company’s software infrastructure as contributing factors to the growth. During the quarter, Palantir closed 66 deals worth at least $5 million and 42 deals totaling at least $10 million. The total value of its contracts increased by 140% from last year to $2.27 billion.

Net income rose 144% to approximately $326.7 million, or 13 cents per share, compared to about $134.1 million, or 6 cents per share, a year ago.

Palantir’s shares have more than doubled this year as investors bet on the company’s AI tools and contract agreements with governments. The company’s market value has surpassed $379 billion, placing it among the top 20 most valuable U.S. companies, ahead of Salesforce, IBM, and Cisco. Shares reached a new high on Monday.

However, buying the stock comes at a premium, with shares trading at 276 times forward earnings according to FactSet. Tesla is the only other top 20 company with a triple-digit ratio, at 177.