Palantir’s US Government Revenue Surges 96% to $953 Million

Palantir’s U.S. government revenue climbed 96% to $953 million in the third quarter, as the data analytics company expanded its role in American military programs under the second Trump administration.

The government business helped lift group revenue to $2.31 billion, also a 96% increase from a year earlier. That exceeded the $2.18 billion analysts had forecast.

Yet shares fell more than 7% in premarket trading as a slowdown in new deals raised concerns about whether Palantir could sustain its expansion and support a valuation above $400 billion, The Wall Street Journal reported.

Military Software Footprint Expands

Palantir supplies technology for the Army’s new command-and-control system and the Pentagon’s Maven Smart System, an artificial intelligence targeting platform.

Maven had roles in the operation that resulted in the arrest of former Venezuelan President Nicolás Maduro and in the Iran war.

The Marine Corps recently widened access to the system across its units.

The company has gained additional government contracts during Trump’s second administration.

Its revenue growth has accelerated in every quarter since mid-2023, following an earlier slowdown in government work.

“This is not mere growth,” chief executive Alex Karp wrote in his shareholder letter.

“It is a rate of expansion that represents a degree of intensity and sustained momentum that we believe is unmatched in recent economic history.”

Commercial Revenue Moves Ahead

Despite the government business’s expansion, U.S. commercial revenue grew faster, rising 148% to $984 million.

It was the first quarter in which the company’s American commercial sales exceeded those from the U.S. government.

Net profit reached $1.13 billion, or 44 cents a share, compared with $475.6 million, or 18 cents a share, a year earlier.

Adjusted earnings of 44 cents a share beat the 41-cent consensus compiled by FactSet.

New business was less buoyant. Palantir secured 212 deals with a combined value of $2.9 billion, down from 220 agreements totaling $3.4 billion in the previous quarter.

The company nevertheless increased its annual revenue forecast to between $8.53 billion and $8.534 billion.

It expects fourth-quarter sales of $2.649 billion to $2.653 billion, ahead of analysts’ $2.46 billion estimate.

AI Competition and Overseas Scrutiny

Palantir is pitching its commercial software to companies seeking greater control over their data and AI systems.

In September, it announced an offering pairing its software with Nvidia’s open-weight models, which it said would preserve customers’ control of their data.

However, competing AI models can also combine data, generate conclusions and support decisions at a lower cost, according to analysts, employees and industry executives.

“The main risk for Palantir is increasing competition from the LLMs,” analyst Louie DiPalma wrote in a research note.

The company also faces pressure in the U.K., where critics are urging lawmakers to end its public health data contract.

Their objections include its costs, access to patient information, and Palantir’s work with the U.S. military and immigration enforcement.