Palantir, a defense technology firm, reported weaker-than-expected guidance, causing its shares to fall around 7% in extended trading. The company’s earnings per share were at 8 cents adjusted, matching analyst estimates, while revenues came in at $634 million, slightly below the $625 million expected. For the upcoming second quarter and full year, Palantir issued guidance of revenue between $649 million to $653 million for the second quarter, and $2.68 billion to $2.69 billion for the full year, both weaker than analyst consensus estimates.
CEO Alex Karp highlighted the anticipated growth of their U.S. commercial business as a significant driver of growth in the near term, emphasizing the importance of software in transforming warfare in the 21st century. He stated that the platforms used by defense and intelligence partners pose a real threat to the survival of enemies. Despite the weaker guidance, Palantir reported $105.5 million in net income for the quarter, marking the company’s sixth straight quarter of profitability on a GAAP basis. Karp mentioned that their profit for the quarter exceeded the revenue generated in an entire year over a decade ago.
Revenue for Palantir in the first quarter was up 21% year-over-year, reaching $634 million compared to $525 million in the previous year. The company had recently signed a $178 million contract with the U.S. Army to assist in developing a next-generation sensor station, demonstrating its success in marketing artificial intelligence products to both the government and the private sector. Palantir also conducts “bootcamps” with potential customers to provide hands-on experience with their technology, conducting over 660 bootcamps during the first quarter.
Despite the solid revenue beat for the first quarter and success in marketing its products, the weaker full-year guidance was unexpected. Palantir’s ability to quickly deliver results to its customers is a key factor in attracting and retaining clients, with Karp stating that they believe their platform is the only one that works for their customers. The company’s focus on leveraging big data and artificial intelligence software for governments and corporations worldwide positions them as a significant player in the defense tech sector. While the weaker guidance may have impacted the stock price, Palantir’s continued profitability and growth trajectory remain positive indicators for the future.
