Palantir shares dip despite Q1 revenue beat and raised full-year outlook

Shares of Palantir Technologies Inc. fell more than 8% in after-hours trading today, despite the big data analytics company beating expectations on revenue and guidance, as investors may have been anticipating even stronger results.

For its fiscal 2025 first quarter ended March 31, Palantir reported adjusted earnings per share of 13 cents, up from eight cents per share in the same quarter of 2024, on revenue of $883.9 million, up 39% year-over-year. Earnings per share were in line with the 13 cents expected by analysts, while Palantir’s revenue came in ahead of an expected $863 million.

Palantir saw U.S. revenue grow 55% year-over-year, to $828 million, with U.S. commercial revenue up 71%, to $255 million, and U.S. government revenue up 45%, to $373 million.

The quarter also saw the company booking its highest quarter of U.S. commercial contract value, which came in at $810 million, up nearly threefold from a year ago. Total U.S. commercial remaining deal value rose 127%, to $2.32 billion as of the end of March.

New deals and customers were key to Palantir’s strong figures, with the company’s customer count up 39% year-over-year. The company closed 139 deals of at least $1 million in the quarter, 51 deals of at least $5 million and 31 deals of at least $10 million.

Business highlights in the quarter included the integration of xAI Corp.’s Grok-2 and Grok-2 Vision models into Palantir’s Artificial Intelligence Platform, enhancing capabilities across Logic, Automate, Pipeline Builder and other AIP tools with advanced language and vision support. Palantir also introduced a new Model Experiments application programming interface that enables developers to track, visualize and compare machine learning training runs using Python, making it easier to optimize models within existing workflows.

The quarter also saw Palantir announcing a strategic partnership with Databricks Inc. that is aimed at combining Palantir’s AI operating system with Databricks’ data engineering and analytics platform. The collaboration is looking to deliver a more unified AI and data solution for enterprise and government customers.

“We are in the middle of a tectonic shift in the adoption of our software, particularly in the U.S., where our revenue soared 55% year-over-year, while our U.S. commercial revenue expanded 71% year-over-year in the first quarter to surpass a one-billion-dollar annual run rate,” said co-founder and Chief Executive Alexander C. Karp. “We are delivering the operating system for the modern enterprise in the era of AI.”

As a result, he added, “we are raising our full-year guidance for total revenue growth to 36% and our guidance for U.S. commercial revenue growth to 68%.”

For its fiscal second quarter, Palantir expects revenue of $934 million to $938 million and adjusted income from operations of $401 million to $405 million. The revenue outlook was solidly ahead of the $899.4 million expected by analysts.

For its full fiscal year, the company expects revenue of $3.89 billion to $3.902 billion, up from a previous full-year outlook of $3.74 billion to $3.75 billion.

Image: Palantir