Executive Summary
In Q3 2024, Palantir Technologies Inc (PLTR) demonstrated exceptional performance, reporting a revenue of $725.5 million, marking a year-over-year growth of 30%. This growth was significantly bolstered by a robust demand for AI-driven solutions, with U.S. revenue increasing by 44% compared to the previous year. Management underscored their focus on leveraging AI to optimize operational efficiencies, reflecting a growing trend towards digital transformation across various sectors. The increase in net income to $143.5 million, up 100.7% year-over-year, coupled with strong cash flows, positions Palantir favorably for future growth, particularly as it expands its footprint in both government and commercial sectors.
Key Performance Indicators
Key Insights
1. Revenue: $725.5M (+30% YoY)
2. Net Income: $143.5M (+100.7% YoY)
3. Adjusted Operating Margin: 38% (+4% QoQ)
4. Customer Count: 629 (+39% YoY)
5. Cash Flow from Operations: $420M (+6.99% QoQ)
6. Adjusted Free Cash Flow: $435M (+60% margin)
7. Rule of 40 Score: 68 (up from 64 last quarter)...
Financial Highlights
1. Revenue: $725.5M (+30% YoY)
2. Net Income: $143.5M (+100.7% YoY)
3. Adjusted Operating Margin: 38% (+4% QoQ)
4. Customer Count: 629 (+39% YoY)
5. Cash Flow from Operations: $420M (+6.99% QoQ)
6. Adjusted Free Cash Flow: $435M (+60% margin)
7. Rule of 40 Score: 68 (up from 64 last quarter)
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
725.52M |
29.98% |
6.99% |
| Gross Profit |
578.88M |
28.57% |
5.33% |
| Operating Income |
113.14M |
182.97% |
7.41% |
| Net Income |
143.53M |
100.72% |
7.01% |
| EPS |
0.06 |
92.75% |
6.16% |
Key Financial Ratios
operatingProfitMargin
15.6%
operatingCashFlowPerShare
$0.19
freeCashFlowPerShare
$0.19
Management Commentary
AI Momentum: Ryan Taylor emphasized the strong revenue growth of 30% year-over-year driven by an 'intensifying AI revolution.' He noted that U.S. government business saw a 40% increase year-over-year, highlighting Palantir's prominence in the defense sector.
Market Position: Alex Karp stated, "We are at the beginning of witnessing massive changes in both government and commercial sectors, with AI being central to enhancing operational capabilities. This commitment to innovation has led to a 44% growth within the U.S. market."
"Our results are exceptionally strong. Revenue grew 30% year-over-year driven by an intensifying AI revolution that the U.S. is rapidly driving." - Ryan Taylor
— Ryan Taylor
"In this winner-take-all AI economy, the divide is widening between those who are leveraging AIP and those who are not." - Ryan Taylor
— Ryan Taylor
Forward Guidance
Management has revised their revenue guidance for FY2024 upward to $2.805 billion to $2.809 billion, driven by the strong demand for commercial products and government contracts. They anticipate fourth-quarter revenue in the range of $767 million to $771 million and expect to maintain an adjusted operating margin around 39%. Investors should closely monitor the growing customer pipeline and the potential for further cash flow generation as AI solutions gain traction.