Palantir Technologies has reported impressive earnings, exceeding revenue expectations and demonstrating strong growth amid increasing demand for its data analysis services. The Denver-based company revealed on Monday its projections for the first quarter and the fiscal year, surpassing Wall Street estimates, fueled by the rising adoption of generative artificial intelligence (AI).
For the upcoming March quarter, Palantir forecasts revenues between $858 million and $862 million, significantly above analysts’ consensus estimate of $799.4 million. The company has also raised its guidance for the fiscal year 2025, projecting revenue between $3.74 billion and $3.76 billion, outpacing the average analyst estimate of $3.52 billion, according to data compiled by LSEG.
Palantir’s Chief Revenue Officer, Ryan Taylor, attributed the revenue boost to both new customers and expansions among existing clients utilizing Palantir’s AI platform. He stated, “The growth is driven by companies rolling out the most sophisticated generative AI technologies, and we expect this to continue.” Notably, the number of Palantir's customers surged by 43% last quarter, reflecting strong market interest.
The company is also witnessing heightened competition, especially from Chinese startup DeepSeek, which claims its AI models can match or even surpass Western competitors at significantly lower costs. Taylor assured stakeholders, claiming Palantir will work to prevent U.S. government clients from using DeepSeek’s models, emphasizing trust and security.
Palantir, known for its close ties with government agencies and defense sectors, derived over 40% of its revenue from U.S. government contracts last quarter. Nonetheless, it aims to reduce its dependence on governmental spending by ramping up commercial customer engagements, especially as U.S. business revenue is expected to grow by at least 54% to over $1.80 billion by 2025.
At the close of its fiscal fourth quarter, Palantir reported earnings of $0.14 per share, which exceeded expectations by three cents. The revenue surged 36% year over year from $608.4 million to $827.5 million, also surpassing analyst predictions of $775.9 million. This marked acceleration is attributed to the explosive demand for AI technologies brought on by tools like ChatGPT from OpenAI.
Following the earnings announcement, Palantir's shares skyrocketed, climbing more than 14% during after-hours trading, continuing the strong rally seen throughout last year. The stock's value has increased over 300% throughout 2024, contributing to its inclusion in the S&P 500 and the Nasdaq-100 indices.
Palantir CEO Alex Karp remarked, “Our business results show we stand at the center of the AI revolution.” He expressed confidence this momentum would not be short-lived, asserting, “We are just at the beginning of a revolution, which will accompany us for years and decades.”
Looking at the bigger picture, the recent increases in tariffs ordered by former President Donald Trump are expected to bolster the demand for Palantir’s analytics services centered around supply chain and logistics management. Taylor noted these factors could stimulate growth responses to client needs for enhanced data-driven insights.
Overall, Palantir’s recent performance showcases not just resilience but also strategic positioning to leverage burgeoning market trends within AI and data analytics. The company's commitment to innovatively meeting its clients’ needs positions it well for sustained growth as businesses increasingly lean on sophisticated software capabilities to navigate modern challenges.