Palantir expects quarterly revenue above estimates on strong AI demand
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Nov 2 : Palantir Technologies forecast revenue above estimates for the last three months of the year after topping third-quarter expectations, banking on sustained demand for its data-analytics software from the US government and commercial clients.
The company expects fourth-quarter revenue to be between $2.649 billion and $2.653 billion, it said on Monday, above analysts' average estimate of $2.46 billion.
Revenue from commercial clients surpassed government revenue in the US for the first time in the third quarter, driven by the rapid adoption of AI software to improve operations and safeguard sensitive data.
Palantir, which develops the Maven Smart System used by NATO's military headquarters and several European armed forces, has built its business around government and defense contracts.
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Total revenue in the third quarter jumped about 96 per cent to $2.31 billion, the second straight quarter of 90 per cent growth. Analysts had estimated $2.18 billion, according to data compiled by LSEG.
"We have now essentially doubled our entire business since the same quarter last year," CEO Alex Karp said in a letter to shareholders.
Palantir's US commercial revenue grew by 148 per cent to $984 million, while US government revenue increased by 96 per cent to $953 million during the period.
The company's shares were last up nearly 1 per cent in volatile extended trading.
"Like all AI names, Palantir came into earnings priced to perfection, hence the pullback off the beat. Elevated expectations seem to be the main factor holding back this recent high flyer," said Ryan Lee, senior vice president of product and strategy at Direxion.
Palantir has a 12-month forward price-to-earnings ratio of 83.38, compared with Snowflake's 109.05 and Datadog's 80.16.
The company reported a total of 1,090 customers in the trailing 12-month period ending September 30, with 904 classified as commercial.
Palantir also raised its annual revenue expectations to between $8.530 billion and $8.534 billion, up from its prior estimates of between $8.150 billion and $8.158 billion.
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