Palantir posts its fastest revenue growth ever while calling out 'AI slop'

By Christine Ji

Palantir's earnings beat expectations on the heels of explosive demand in the company's core U.S. market

Palantir's first-quarter revenue grew 85%, powered by the company's U.S. business.

Palantir delivered another record quarter on Monday as the company's artificial-intelligence solutions powered an earnings beat.

Revenue for the first quarter rose 85% year over year to $1.63 billion, beating FactSet consensus estimates of $1.54 billion. Adjusted earnings came out to 33 cents a share, beating the 28 cents projected by Wall Street.

In addition to growing the top line, Palantir (PLTR) has positioned itself as a provider of value-additive solutions in contrast to "AI slop." The company's Artificial Intelligence Platform, which connects to a customer's data and operations to enable agentic AI workflows, "is the no-slop zone ... where every agent action is governed, attributed and auditable," CTO Shyam Sankar said on the earnings call.

Still, shares of Palantir fell 2.7% in after-hours trading.

"We almost doubled the size of our entire business, of all of ourrevenues generated across the government and commercial sectors, inthe span of only 12 months," CEO Alex Karp wrote in his letter to shareholders. The 85% revenue growth rate marks the company's highest-ever quarterly performance.

Palantir's growth in the past few quarters has been driven by its core U.S. business, especially in commercial end markets. Total U.S. revenue for the quarter came out to $1.3 billion, a 104% year-over-year increase. Commercial revenue grew 133% to $595 million over the same period, rapidly catching up to Palantir's U.S. government business, which did $687 million in revenue and grew 84%.

On the earnings call, Palantir flagged its recent $300 million purchase agreement with the U.S. Department of Agriculture to help farmers manage rising supply costs by consolidating data into a single system.

See more: Palantir pioneered the hottest job in tech. Its legions of copycats may not succeed.

"We achieved this staggering growth with a hiring discipline that is too rare in the software industry today," Karp wrote to shareholders. Palantir's revenue per employee reached $1.5 million on an annualized basis, and Karp pointed out on the earnings call that the company only employs 70 salespeople.

The company lifted its forward guidance. Palantir expects revenue between $1.797 billion and $1.801 billion for the current quarter, above the $1.683 billion expected by analysts. For the full year, Palantir anticipates between $7.650 billion and $7.662 billion of revenue. Wall Street analysts had been projecting $7.245 billion.

Palantir's stock hasn't been immune to the pervasive software selloff this year. But even as shares of Palantir have fallen 17% since the beginning of the year, the company has become a role model for other software players looking to successfully drive AI adoption. On the earnings call, Palantir said that it had recently replaced its legacy customer-relationship-management software with an AI-first solution built on top of the company's AIP.

On the earnings call, Karp pushed back against the "hyperbolic rhetoric" of AI taking all jobs. "What actually does work is a platform built by a motley crew of highly technical people," he said.

Palantir's forward-deployed-engineer role - which entails sending employees directly to customer sites to create bespoke solutions - has risen in popularity among both legacy software giants and frontier AI labs. On Monday, OpenAI and Anthropic finalized new joint ventures with private-equity firms for enterprise AI services that involve embedding engineers directly into customer organizations.

Read: Anthropic and OpenAI are following Palantir's playbook as they seek to grow AI usage

-Christine Ji

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05-04-26 2020ET