Executive Summary
Palantir Technologies Inc (NASDAQ: PLTR) has reported impressive fourth quarter 2024 results, showcasing a robust growth trajectory with revenue soaring 36% year-over-year to $828 million, marking a significant acceleration in demand driven by advancements in AI. The company's U.S. business witnessed remarkable performance, growing 52% year-over-year, underscoring its market leadership in AI production use cases. Management highlighted a sharp increase in total contract value (TCV), which rose 56% year-over-year, reflecting strong demand across various sectors. CEO Alex Karp emphasized the company's commitment to operationalizing AI and enhancing enterprise efficiencies, stating, 'In this AI revolution, anyone looking for a solution that actually works is going to choose Palantir.' Overall, Palantir's financial stability and proactive investment in technology position it well for continued growth amidst evolving market conditions.
Key Performance Indicators
QoQ: -90.24% | YoY:-83.22%
QoQ: -44.95% | YoY:-15.40%
QoQ: -46.24% | YoY:-19.67%
Key Insights
**Revenue**: $828 million (up 36% YoY, 14% QoQ)
**Net Income**: $79 million, corresponding to a net income margin of 10% (down 15% YoY due to increased expenses related to stock-based compensation).
**EPS**: $0.03 diluted (down 19.67% YoY).
**Adjusted Free Cash Flow**: $517 million (representing a margin of 63%).
**Rule of 40 Score**: Increased to 81, indicating a healthy balance between growth and profitability.
**Customer Count**: Grew 43% YoY to 711 customers, showcasing heightened ...
Financial Highlights
Revenue: $828 million (up 36% YoY, 14% QoQ)
Net Income: $79 million, corresponding to a net income margin of 10% (down 15% YoY due to increased expenses related to stock-based compensation).
EPS: $0.03 diluted (down 19.67% YoY).
Adjusted Free Cash Flow: $517 million (representing a margin of 63%).
Rule of 40 Score: Increased to 81, indicating a healthy balance between growth and profitability.
Customer Count: Grew 43% YoY to 711 customers, showcasing heightened adoption of Palantir’s platforms.
Management noted a strong U.S. commercial growth of 64% YoY, with key expansions in government contracts further solidifying their market presence. The forward guide indicates a revenue midpoint of $3.749 billion for 2025, suggesting a targeted growth rate of 31%.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
827.52M |
36.03% |
14.06% |
| Gross Profit |
652.99M |
30.67% |
12.80% |
| Operating Income |
11.04M |
-83.22% |
-90.24% |
| Net Income |
79.01M |
-15.40% |
-44.95% |
| EPS |
0.03 |
-19.67% |
-46.24% |
Key Financial Ratios
operatingProfitMargin
1.33%
operatingCashFlowPerShare
$0.2
freeCashFlowPerShare
$0.2
priceEarningsRatio
551.58
Management Commentary
- AI Revolution: Management stressed the importance of AI as a core driver for their growth, with Ryan Taylor stating, 'The AI revolution continues, transforming industries.'
- Contract Wins: Taylor highlighted $1.8 billion in TCV signed last quarter, representing a record number of deals including 32 contracts worth $10 million or more.
- Customer Expansion: The U.S. government sector showed a 45% growth YoY, proving essential partnerships and renewed contracts.
- Proactive Investments: Shyam Sankar noted their commitment to developing robust ontologies, allowing for seamless integration in enterprise applications, which is crucial for effective utilization of AI technology.
- Cultural Commitment: Karp elaborated on Palantir's culture and ethos stating, 'Every single Palantirian is special... and we need to continue to attract and retain people who are different.'
'With the proliferation of AI models, the raw AI labor supply is exploding.'
— Ryan Taylor
'Our foundational investments in ontology and infrastructure have positioned us to uniquely deliver on AI demand.'
— Shyam Sankar
Forward Guidance
Palantir is guiding for Q1 2025 revenue between $858 million and $862 million, indicating sustained growth momentum. For the full year 2025, revenue guidance suggests a midpoint of $3.749 billion, representing a projected growth of 31%. This is buoyed by intensified focus on AI solutions and increasing customer engagements, particularly in commercial segments. Key factors for investors to watch include customer acquisition rates in the U.S. commercial market and further development of AI capabilities through their platform offerings.