Palantir (PLTR) Q3 2026 Earnings Call: Umsatz steigt um 96 %, Prognose angehoben

Kernaussagen

• Palantir wies für das 3. Quartal des Geschäftsjahres 2026 einen Umsatz von 2,313 Milliarden US-Dollar aus, was einem Anstieg von 96 % gegenüber dem Vorjahreszeitraum und 20 % gegenüber dem Vorquartal entspricht – die höchsten Wachstumsraten seit dem Börsengang.
• Der US-Umsatz stieg im Jahresvergleich um 119 % auf 1,937 Milliarden US-Dollar und machte 84 % des Gesamtumsatzes aus. Der US-Umsatz im kommerziellen Segment legte um 148 % auf 984 Millionen US-Dollar zu und übertraf damit erstmals den Umsatz mit US-Behörden.
• Das Betriebsergebnis nach GAAP erreichte 1,085 Milliarden US-Dollar, was einer Marge von 47 % entspricht. Das bereinigte Betriebsergebnis belief sich auf 1,427 Milliarden US-Dollar bei einer Marge von 62 %.
• Der operative Cashflow belief sich auf insgesamt 1,205 Milliarden US-Dollar, während der bereinigte freie Cashflow 1,216 Milliarden US-Dollar erreichte (Marge von 53 %).
• Das Management hob die Umsatzprognose für das Gesamtjahr 2026 auf 8,530 bis 8,534 Milliarden US-Dollar an und erwartet, dass der US-Umsatz im kommerziellen Bereich 3,559 Milliarden US-Dollar übersteigen wird, was einem Wachstum von mindestens 143 % entspricht.
• Das Management führte die Dynamik im kommerziellen US-Geschäft auf die Nachfrage nach Souveräner KI, AIP-gestützten Unternehmens-Workflows sowie auf eine schnellere Umwandlung von Pilotprojekten und Bootcamps in größere Implementierungen zurück.

Wichtige Finanzdaten

Geschäfts- und operative Entwicklung

Das US-Gewerbegeschäft bildete den primären Wachstumsmotor von Palantir. Der Umsatz stieg von Q3 2025 um 587 Millionen US-Dollar auf 984 Millionen US-Dollar, während die Zahl der US-Gewerbekunden im Jahresvergleich um 29 % und gegenüber dem Vorquartal um 5 % auf 686 anstieg. In den letzten 12 Monaten erreichten die Auftragseingänge im US-Gewerbesegment (Total Contract Value Bookings) 6,114 Milliarden US-Dollar, was einem Zuwachs von 62 % entspricht.

Das Management führte die rasche Ausweitung ursprünglicher Pilotprojekte als Beleg für die Akzeptanz an. Beispielsweise weitete ein Industriematerialunternehmen ein Pilotprojekt von knapp 3 Millionen US-Dollar auf einen Vertrag mit einem jährlichen Vertragswert von 29 Millionen US-Dollar aus. Ein globaler Sportartikelkonzern wandelte ein Pilotprojekt über 1,6 Millionen US-Dollar in einen Vertrag mit einem jährlichen Vertragswert von rund 21 Millionen US-Dollar um.

Der internationale kommerzielle Umsatz wuchs im Jahresvergleich um 21 %, legte jedoch gegenüber dem Vorquartal nur um 1 % auf 184 Millionen US-Dollar zu. Strategische kommerzielle Verträge trugen etwa 400.000 US-Dollar oder weniger als 0,02 % zum Gesamtumsatz bei.

Auch der Behördenumsatz überschritt erstmals die Marke von 1 Milliarde US-Dollar. Das Wachstum bei den US-Behörden spiegelte die Abwicklung bestehender Programme sowie Neuaufträge wider, darunter eine Hauptvereinbarung der US-Army zur Produktion von acht TITAN-Systemen. Laut Management überschritt Maven die Zahl von 100.000 Nutzern und ist in allen Teilstreitkräften, Einsatzkommandos (Combatant Commands) sowie bei mehreren Kampfunterstützungsbehörden im Einsatz.

Palantir hob Souveräne KI (Sovereign AI) als wesentlichen Nachfragetreiber hervor. Das Management erklärte, dass Kunden AIP und die Ontology nutzen, um Open-Weight-Modelle anhand operativer Daten nachzutrainieren (Post-Training), während sie gleichzeitig die Kontrolle über Unternehmensdaten, Logik und Sicherheit behalten. Zudem hob das Unternehmen Implementierungen hervor, die Modellkosten, Latenzen oder den manuellen Arbeitsaufwand reduzierten, unter anderem bei L3Harris, Tampa General und McCarthy Building Companies.

Prognose des Managements

Das Management rechnet weiterhin für jedes Quartal des Jahres 2026 mit einem positiven Betriebsergebnis und Nettoergebnis nach GAAP. Der revidierte Mittelwert der Jahresumsatzprognose entspricht einem Wachstum von 91 % gegenüber dem Vorjahr und liegt neun Prozentpunkte über dem in der Prognose des Vorquartals implizierten Wachstum.

Risiken und Beobachtungspunkte

• Palantir hat mehrere Verträge für Souveräne KI im achtstelligen Bereich mit ungewöhnlich kurzen Laufzeiten unterzeichnet. Das Management geht davon aus, dass Vertragsvolumen und Laufzeit im Laufe der Zeit zunehmen werden; dabei handelt es sich derzeit jedoch noch um eine Erwartung und nicht um ein gesichertes Ergebnis.
• Laut Management übersteigt die Nachfrage derzeit die Kapazitäten des Unternehmens zur Betreuung potenzieller Kunden, was die Einstellung von technischem Personal und Bereitstellungsressourcen zu einem operativen Engpass macht.
• Das internationale kommerzielle Wachstum verblieb deutlich hinter dem US-Wachstum im kommerziellen Bereich und stieg gegenüber dem Vorquartal um lediglich 1 %.
• Der Umsatz aus strategischen kommerziellen Verträgen wird in Q4 2026 voraussichtlich unter 500.000 US-Dollar bleiben; im Anschluss werden aus diesen Verträgen keine weiteren Umsätze erwartet.
• Das Unternehmen investierte weiterhin kontinuierlich in AIP, Souveräne KI, Forschung und Entwicklung sowie die Einstellung von technischem Personal. Die bereinigten Aufwendungen stiegen in Q3 im Vergleich zum Vorquartal um 20 % und im Jahresvergleich um 53 % auf 887 Millionen US-Dollar.

Wichtigste Erkenntnisse aus der Analysten-Fragerunde

Analysten konzentrierten sich auf Bootcamps für Souveräne KI, den Wettbewerb mit Modell-Entwicklern sowie die strategische Rolle des Regierungsgeschäfts von Palantir.

CEO Alexander Karp führte aus, dass sich die Zeitspannen für die Kundenkonvertierung erheblich verkürzt haben: Unternehmen wechselten schneller vom Erstkontakt zu Pilotprojekten und zur Serienanwendung. Erstverträge seien möglicherweise kürzer, aber das Management sehe erhebliches Ausbaupotenzial, sobald Kunden die Anwendungsfälle validiert haben.

Hinsichtlich des Wettbewerbs mit KI-Laboratorien beschrieb das Management Palantir als Diffusions- und Anwendungsschicht für Unternehmen und nicht als direkten Ersatz für Modell-Anbieter. CTO Shyam Sankar argumentierte, dass die Kapitalrendite (ROI) von Unternehmen auf Workflow-Ebene gemessen werden sollte und nicht allein an der Produktivität einzelner Mitarbeiter.

Zudem erörterte das Management Fragen der militärischen Abschreckung. Karp und Sankar erklärten, die Behördentechnologie von Palantir solle die operative Einsatzfähigkeit und die industrielle Produktion stärken, damit potenzielle Gegner die Kosten eines Konflikts erkennen.

Vollständiges Transkript der Telefonkonferenz

Vollständiges Transkript der Telefonkonferenz

Ausführungen des Managements

Ana Soro

Good afternoon. I'm Ana Soro from Palantir's finance team, and I'd like to welcome you to our third quarter 2026 earnings call. We'll be discussing the results announced in our press release issued after the market closed and posted on our Investor Relations website.

During the call, we will make statements regarding our business that may be considered forward-looking within applicable securities laws, including statements regarding our fourth quarter and fiscal 2026 results, management's expectations for our future financial and operational performance, which does not constitute formal guidance unless indicated as such in the accompanying written materials and other statements regarding our plans, prospects, expectations, goals and aspirations. These statements are not promises or guarantees and are subject to risks and uncertainties, which could cause them to differ materially from actual results.

Information concerning those risks is available in our earnings press release distributed after the market closed today and in our SEC filings. We undertake no obligation to update forward-looking statements, except as required by law. Further, during the course of today's call, we will refer to certain adjusted financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from GAAP measures.

Additional information about these non-GAAP measures, including reconciliation of non-GAAP to comparable GAAP measures is included in our press release and investor presentation provided today. Our press release, investor presentation and other earnings materials are available on our Investor Relations website at investors.palantir.com. Over the course of the call, we will refer to various growth rates when discussing our business. These rates reflect year-over-year comparisons unless otherwise stated.

Joining me on today's call are Alex Karp, Chief Executive Officer; Shyam Sankar, Chief Technology Officer; Dave Glazer, Chief Financial Officer; and Ryan Taylor, Chief Revenue Officer and Chief Legal Officer.

I'll now turn it over to Ryan to start the call.

Ryan Taylor

Humanity is facing world historic crossroads in how it chooses to deal with AI, and through it all, our genre defining technology has led the way redefining the industry. We've been shaping the AI revolution from its start. And despite being only at the very beginning of the Sovereign AI revolution, we already see how it is transforming the size of the market.

We achieved revenue growth of 96% year-over-year and 20% sequentially, the highest growth rates we've ever delivered as a public company. These results are the continued financial expression of the transformational impact we're delivering for our customers, which is also evident in the depth of our customer relationships. The third quarter average trailing 12-month revenue from our top 20 customers increased 76% year-over-year to $146 million per customer.

Our U.S. business is in overdrive. We brought in $1.9 billion in U.S. revenue, which grew 119% year-over-year and 23% sequentially, representing 84% of our total revenue. This is led by our U.S. commercial business, which grew 148% year-over-year and 29% sequentially, and surpassed our U.S. government business revenue in the quarter for the first time.

In U.S. commercial, the average trailing 12-month revenue per customer grew 88% year-over-year and 20% sequentially. The U.S. continues to be the epicenter of the AI revolution. I won't repeat what I said last quarter because it has become self-evident in our unparalleled results. 2 years ago, we led the way with our commoditized cognition thesis. And today, the market is only beginning to recognize the full force of Sovereign AI. It's pervasive in the conversations I'm having with customers and undeniable in the results they've shared.

The COO of OptumServe highlighted "sovereignty doesn't mean that we have to build everything ourselves. What it does mean, though, is protecting what differentiates us while retaining the ability to evolve, to adapt and to scale our solutions as our customers' needs change, and they change often. It means knowing where the right partner can help us move faster." L3Harris noted that by fine-tuning open source models on its own data, a sovereign model outperformed the frontier model that had been using in less than 48 hours and cut costs by 95% in preliminary results.

NVIDIA reported that by evaluating and post training its open models, it was able to get its smallest, most efficient model to outperform its largest model by a large gap, and can now retrain that model on just a single GPU in a couple of hours, enabling them to retrain any time they have data to improve the decision intelligence. We captured our alpha and we trained it into a model. We couldn't have started this process until we built the workflows in Palantir.

And our customers are choosing Palantir and our Sovereign AI to transform their organizations at a furious pace. An industrial materials company piloted a nearly $3 million engagement in Q2 2026 before converting to a $29 million ACV deal last quarter. A global athletic company converted a $1.6 million pilot that began in Q1 2026 into an approximately $21 million ACV deal last quarter. A global home appliance company converted a $1 million pilot that began in Q2 2026 into a $3 million ACV deal within the same quarter then expanded nearly fivefold to a $15 million ACV deal in Q3 across commercial, finance and supply chain workflows.

After an agent camp in Q2 2026, an apparel company signed a $2.5 million pilot, then last quarter, they converted to an $11.5 million ACV deal. These commitments are downstream of the measurable impact we're delivering with our customers. With Palantir Sovereign AI, McCarthy Building Companies will save 30,000 hours annually by using post train Nemotron to help turn complex project requirements into contract language that allocates risk and clearly define subcontractor obligations.

Tampa General is deploying Sovereign AI to keep sensitive data and model processing local while enforcing its own risk and privacy standards for LLM traffic, and supporting the granular controls Tampa General wants to define for itself. Using fine-tuned and post trained Nemotron to achieve this outcome, together, we also improved model performance by 7% and reduce latency by 22x.

Turning to our U.S. government business. Revenue grew 96% year-over-year and 18% sequentially, demonstrating continued extraordinary impact across Civil and Defense, with Maven as our foundational work. In Q3, the Army awarded Palantir Prime Agreement to produce 8 TITAN systems. And last quarter, FAA highlighted the impact of our work together, stating "that shift from scattered data to an embedded ontology is what changes the game. This is a modernization and operational form changing how safety work gets done." And noted that the work they can do now would require hundreds of analysts without Palantir.

As I reflect on our results, I see the furious pace continuing unabated. I'm invigorated unlike ever before by the ambition I'm hearing from our customers and their demand for Sovereign AI. A revolution we remember is barely 1 quarter old. As extraordinary as these results are, they are only the opening chapter of Sovereign AI.

I'll now turn it over to Shyam.

Shyam Sankar

Thanks, Ryan. Palantir is obsessed with turning tokens into economic value. It's clear that the vast majority of economically valuable problems that LLMs can solve can be solved with intelligence at or below the frontier. So what's preventing this from happening? On one end, you have the model makers who can't conceive of solving any problem except through model improvement. So they aren't even trying. And on the other end, you have the hard work of diffusion, which sounds passive, but is anything but all the value comes from the elegant integration of AI, software and humans. And this requires not a harness for the model, but something closer to a harness for the enterprise, which is exactly what AIP is.

Most profoundly that concede that the labs have wrong is the belief that the atomic unit of the enterprise is the individual knowledge worker. It is not. The fundamental unit of the enterprise is the workflow. You can make any set of workers more productive and generate no actual ROI. For some things like coding, the knowledge worker is the workflow. So there's perfect product market fit. But for the vast majority of the enterprise, it is not. Given this, it is incredibly valuable that AIP implements enterprise workflows and is able to bring AI to it in a way that generates objective, quantifiable value.

For example, Page 209 of Anthropic's S-1 talks about AIG's automation of insurance underwriting processes for complex commercial lines of business. That entire workflow and the elegant application of AI, software and humans runs in AIP, and was implemented by Palantir and AIG. We are the diffusion layer, not just of choice, but of necessity.

There's a clear pattern emerging amongst our customers who are most successful at getting value from AI. They have enormous ambition. Their goal is not something lame like OpEx reduction, it's market domination. And the opposite is true. Customers that struggle the most are narrowly focused on reducing costs. AI is a new type of intelligence, simply trying to shoehorn it to replacing the human misses the moment completely. The error of conflating human and machine intelligence locks you into a poorly chosen goal, one that limits your ambition and still remains out of reach.

Instead, we're attacking all the work the enterprise knows it should be doing, but historically, lack the economic resources or capabilities to take on. An agent swarm watching each patient in the ICU ward to help clinicians avoid potential signs of sepsis earlier and improved patient outcomes. An agent swarm per well ahead in the Permian Basin to maximize production. An agent swarm for every customer of our customer to drive growth. This is not about doing the same thing cheaper. It's about defining the productive work that goes beyond yesterday's frontier in capturing and compounding the new economic value it creates and doing so with Sovereign AI.

The examples are everywhere now. It's clear that post training on your specific operational data in Ontology enables better than frontier performance on weights you control, protecting your alpha. Yes, it's cheaper. But the dominant variable is that more use cases can actually get to the threshold of viability for machine intelligence to generate economic value when elegantly integrated into enterprise.

And our product investments in AIP to create a closed loop model factory are making this easy and fast. The specific post-train model is a commodity item. The compounding value is in the post training pipeline that is constantly fed from your operational exhaust, captured in the Ontology, that drives automated post-training runs, model checkpoints, evaluations and deployment across yesterday's, today's and tomorrow's open weight ecosystem.

Our new feature of auto research and continued investment in AIP Evolve, push us closer and closer to an automated loop to build, deploy and evaluate intelligence continuously against ROI. In AIP and Sovereign AI, the Pareto optimal frontier is no longer an unachievable academic aspiration, it is a simple function call. And one we can invoke automatically on your behalf.

At a recent Paycom exercise, we deployed a $30 billion parameter post train model into space, weight, power, cooling constrained compute, ready for the disconnected fight, with superior task-specific performance than GPT 5.6 sold a 3 trillion parameter model. L3Harris realized 95% cost reduction with Sovereign AI. McCarthy will save 30,000 hours a year on subcontractor drafting, achieving better than frontier performance or RFI classification and subcontractor drafting on a post-train Nemotron 4 billion parameter model, where, again, the real value is the substantially greater number of demand events they can process now.

Maven continues to deliver for the joint force, exceeding 100,000 users. Maven is now available to all of the services beyond just the combatant commands and many combat support agencies. We just concluded a Maven Hackathon, 46 teams across the joint force participated. Many amazing projects were built by our 25,000 strong builder community. The winning 2 teams were both Army teams: one building an edge planning and simulation capability for force protection, and a second place, an incredible platform to analyze drone incursions to drive force protection insights.

And we continue to feel demand for Maven down to the tactical edge and disconnected environments, assure and afloat. We have seen incredible success with DORA, disconnected Ontology, resilient architecture, including in the Army's jailbreak effort. DORA is an embedded compute device that brings Maven's capabilities to disconnected operations. Using AIFD, service members can build read-right integrations with legacy sensors and effectors and bring them online in hours entirely unassisted.

With that, I'll turn it over to Dave.

David Glazer

Thanks, Shyam. We had an outstanding third quarter. We delivered our highest ever reported year-over-year revenue growth rate of 96% and our highest ever reported sequential revenue growth rate of 20%. Quarterly revenue crossed the $2 billion mark for the first time, and we surpassed additional $1 billion milestones in commercial revenue, government revenue and GAAP operating income.

Revenue in our U.S. business accelerated yet again, growing 119% year-over-year and 23% sequentially. Our U.S. commercial business grew 148% year-over-year and accelerated to 29% growth sequentially, and our U.S. government business grew 96% year-over-year and 18% sequentially. Demand for our Sovereign AI offering is accelerating our U.S. commercial momentum, helping to make this our first ever quarter that U.S. commercial revenue eclipsed U.S. government revenue, a critical milestone in the history of our company.

On top of this, we are raising our full year U.S. commercial revenue guidance to an excess of $3.559 billion, representing a growth rate of at least 143%. We are also raising our full year 2026 revenue guidance midpoint to $8.53 billion, representing 91% growth year-over-year, a 9-point increase over our full year 2026 revenue guidance from last quarter.

Turning to our global top line results. Third quarter revenue grew 96% year-over-year and 20% sequentially to $2.313 billion. Third quarter U.S. revenue grew 119% year-over-year and 23% sequentially to $1.937 billion. Revenue from our largest customers continues to expand. Third quarter trailing 12-month revenue from our top 20 customers increased 76% year-over-year to $146 million per customer.

Now moving to our commercial segment. Third quarter commercial revenue grew 113% year-over-year and 24% sequentially to $1.168 billion, crossing the $1 billion mark for the first time. We closed $1.652 billion in commercial TCV bookings in the third quarter, representing 17% growth year-over-year.

Our AI platform continues to dominate the U.S. markets as the only real choice for operationalizing LLMs while still giving customers full control over the data, logic, actions and security of their enterprise. Third quarter U.S. commercial revenue grew 148% year-over-year and accelerated sequentially to 29% quarter-over-quarter, totaling $984 million. U.S. commercial revenue was $397 million in the third quarter of 2025, meaning it increased by $587 million in just 1 year. We closed $1.463 billion of U.S. commercial TCV bookings, representing growth of 11% year-over-year.

Over the past 12 months, we closed $6.114 billion of U.S. commercial TCV bookings, a 62% increase from the prior 12 months, highlighting the accelerating demand for AI that creates real operational value while also moving power away from the labs and back into your enterprise.

Total remaining deal value in our U.S. commercial business grew 79% year-over-year and 4% sequentially. We believe Sovereign AI is the latest and largest tech revolution of our generation. We signed multiple 8-figure deals in the quarter that were shorter in duration than usual, as customers rapidly adopted initial Sovereign AI capabilities in their enterprise.

It is important to remember that the Sovereign AI revolution is only 1 quarter old. As we continue to deliver value with Sovereign AI, over time, we expect both the duration and size of these contracts to increase. Our U.S. commercial customer count grew to 686 customers, reflecting growth of 29% year-over-year and 5% sequentially.

Third quarter international commercial revenue grew 21% year-over-year and 1% sequentially to $184 million. Revenue from strategic commercial contracts was approximately $400,000 for the quarter, representing less than 0.02% of overall revenue. We continue to expect revenue from these contracts to be less than $500,000 in the fourth quarter, and we anticipate no further revenue from these contracts beyond the fourth quarter of this year.

Shifting to our government segment. Third quarter government revenue grew 81% year-over-year and 16% sequentially to $1.146 billion, crossing the $1 billion mark for the first time. Third quarter U.S. government revenue grew 96% year-over-year and 18% sequentially to $953 million. This growth was driven by continued execution in existing programs and new awards, reflecting growing demand for our AI platform in government.

Third quarter international government revenue grew 31% year-over-year and 6% sequentially to $192 million. We closed $2.98 billion of TCV bookings, up 6% year-over-year. Net dollar retention was 165%, an increase of 800 basis points from last quarter. We ended the third quarter with $13.4 billion in total remaining deal value, an increase of 55% year-over-year and 2% sequentially, and $4.9 billion in remaining performance obligations, an increase of 88% year-over-year and flat sequentially.

As a reminder, RPO is primarily comprised of our commercial business, as it does not take into account contracts with an initial term of less than 12 months and contractual obligations that fall beyond termination for convenience clauses, both of which are common in most of our government business.

Turning to margin expense. Adjusted gross margin, which excludes stock-based compensation expense, was 85% for the quarter. Adjusted income from operations, which excludes stock-based compensation expense and related employer payroll taxes, was $1.427 billion in the third quarter, representing adjusted operating margin of 62%.

Q3 adjusted expense was $887 million, up 20% sequentially and 53% year-over-year, primarily driven by the continued investment in our AI platform and technical hiring, as we welcomed our latest class of new grad hires. We remain committed to investing in the most elite technical talent as well as R&D for our product pipeline and Sovereign AI efforts, all while delivering on our goals of sustained GAAP profitability.

Third quarter GAAP operating income was $1.085 billion, representing a 47% margin and surpassing the $1 billion mark for the first time. Third quarter GAAP net income was $1.128 billion, representing a 49% margin. Net income has increased nearly eightfold over the last 24 months, from $144 million in the third quarter of 2024.

Third quarter stock-based compensation expense was $319 million and equity-related employer payroll tax expense was $23 million. Third quarter GAAP earnings per share was $0.44. Third quarter adjusted earnings per share was $0.44.

Additionally, our combined revenue growth and adjusted operating margin accelerated to 158% in the third quarter, a 3-point increase to our Rule of 40 score from the prior quarter and our 13th consecutive quarter of an expanding a Rule of 40 score.

Turning to our cash flow. In the third quarter, we generated $1.205 billion in cash from operations and $1.216 billion in adjusted free cash flow, representing margins of 52% and 53%, respectively. We ended the quarter with $10.4 billion in cash, cash equivalents and U.S. treasury securities.

Now turning to our outlook. For Q4 2026, we expect revenue of between $2.649 billion and $2.653 billion, and adjusted income from operations of between $1.640 and $1.644 billion. For full year 2026, we are raising our revenue guidance to between $8.530 billion and $8.534 billion. We're raising our U.S. commercial revenue guidance to an excess of $3.559 billion, representing a growth rate of at least 143%. We are raising our adjusted income from operations guidance to between $5.245 billion and $5.249 billion. We're raising our adjusted free cash flow guidance to between $4.8 billion and $5 billion, and we continue to expect GAAP operating income and income in each quarter of this year.

With that, I'll turn it over to Alex for a few remarks, and then Ana will kick off the Q&A.

Alexander Karp

Welcome to our earnings call. And I think for many, many years, our earnings calls were really about our earnings. Now it is the focal point of tech society and general trends. And I think many, if not most people who are watching this, and it is, by far, the most watched earnings call in the world. It's the one where people come to figure out what's going on, on the ground floor. And given that AI and Sovereign AI is changing the universe in our case, for tremendous good and is showing up in our numbers, people really want to have a sense of, well, what is actually happening in the world, politically, sociologically anthropologically and, of course, financially.

So given that demand and interest in Palantir, and the reality at this moment has become a real focal point of understanding. And quite frankly, many investors watching this are watching it to figure out what's going on with their investments, and not even primarily Palantir. And so there's this larger question of what does it mean to have a business that was built around what we believed and believe now is the most important mission of the world. Supporting our war fighters, bringing them home. Where even as much even a year ago, 2 years ago, that people even involved inside Palantir viewed the core value of our business economically as Glazer would look at it.

And quite frankly, in a very helpful way. He's the force of greed. Glazer's view of our business was, could you talk a little more about commercial. Over the past year -- the past couple of years. And in this quarter, our commercial business eclipsed our government business. And in fact, the market value of that is probably -- justifies our current valuation, given we're growing at -- aggregate business growing at 96%, the juggernaut of U.S. commercial. I mean these numbers are so far outside the bounds of what you could -- I mean, outside the bounds of what even the most optimistic people could think a business like ours could do, while maintaining a way of going to market that is completely generous.

We have products that are unique. We have ways of going to the market are unique. We were the leader of a revolution that was in front of us but none of us really were able to put our name on the sovereign revolution. Meaning, people need to understand how AI can create value, how you can create value out of tokens, how you can keep the value of your own alpha, how is it not transferred to anyone else, and how can you expand it? That revolution, of course, is happening in America.

And then these out-of-bound results, of which we're a metaphor, really show you the future is becoming the present, the present is now. You see it in Europe, which I spent half my life. And at this point, we should kind of avoid talking about it because of what's going on, and it doesn't help to just stamp on them. But you see it across America. You see a reaction to AI. You see the polarization politically. It's because all the value in the market is actually moving to the vehicles in this case, Palantir and really very few others, Anthropic, Open AI, us, others, that where you can actually make a claim that there is some value creation.

Again, it's so extreme that a business that was viewed as a nice to have part of our business, as late as 3 years ago, is now the dominant part of our business. That business grew 29% quarter-on-quarter. It's almost at 150% growth and it's dragging our U.S. growth number over 100%. These are just -- and we did this while attacking the market the way we attack it, very few salespeople. Very impossible way to understand how we are capturing this juggernaut unless you view it as a completely new and different moment.

And so when people are watching this, what is happening in the market? What is happening in our society? It really is the case that the playbook, the products, the way of going to market do not work in most cases. But the things that do, just spring alive. And our somewhat crazy aspiration to take the whole market doesn't look that crazy right now.

And we believe at this company and many of the people watching it, we do not only have a financial reason for taking the whole market, which Glazer is salivating at. We, on the mission side, we believe we have a mission reason for taking the market. And that mission reason is we support your alpha. We support your sovereignty. We've done this for over 20 years. We support the warfighter. We are delighted that we can support the warfighter even more because we're making so much money. But we believe we have a moral imperative to be the dominant player in our industry, broadly defined, including all AI applications and the use of model, open and close, especially training open weight models. And that moral imperative drives every part of our business.

The interesting thing about the internal dynamic of our business, it's not only that the sum of the parts in our business is stronger. That's obvious. 96% growth. Look at our Rule of 40, it's 158%. It's almost like jaw dropping. But we -- the parts of our business, the individual parts, the parts that the people at this company are running. Those parts are stronger than they were before, every part. And that's what you're seeing in these numbers. And arguably for most people watching that, that's what you're seeing in broader society.

And this move to the -- from the future to the present is the reason why many of the classical approaches to business, there was an idea there we're going to fail in 5 years. That doesn't work. You have to execute now and in the present. And this company, Palantir and everyone involved, and all of the people watching this who are on our side, of which there are many, many people, are part of that movement. And that's why we're so really happy and honestly, quite optimistic about the future, especially in the U.S.

Ana Soro

Thanks, Alex. Our first question is from Dan with Yorkville Ives.

Fragen und Antworten

Daniel Ives

Obviously, just another phenomenal quarter. So my question is, with the Sovereign AI boot camps, I mean I've been to -- it seems like they're really becoming huge for converting customers. Can you just walk through like -- Alex, like you talked to so many of these customers like, do they come into a boot camp? They're trying to understand their AI path and then they leave and they're actually a customer? Can you just walk through like -- just from your perspective?

Alexander Karp

Well, I mean what's really shifted on the front line is like there used to be this long walk up to people like talking to us and then you do a pilot, and then you try to get a long pilot and then you kind of lock that in. Because the same way you lock in like hire all these salespeople so that the market believes you're going to have sales kind of thing.

Now it's much more -- people are -- it's super heterogeneous. So some people -- everybody basically comes in on the spectrum of what I have doesn't work now, and I've heard what you have does work. That's usually where it starts. They also strongly believe and are quite tired of what they believe the reality is. My IP is in danger, and I'm getting no value. It's like, and this is -- when we started talking about sovereignty, this was kind of a -- this was something that was being expressed. They felt but they didn't know how to articulate. Now it's something they articulated and they've gone from anger to action.

it's like it's like they've gone from thinking, hey, I'm not in a great marriage. I met the divorce and like they come. And then what's very special now is they're surrounded by people who've had the same journey. And the time line from interaction to them buying pilots or going into production is completely shifted.

And so what like Ryan and I are seeing on the front line in commercial is this much quicker interaction, much quicker to deployment, shorter duration of the contract, but then an ability to expand that contract dramatically. Because as soon as you go in there and you show them that you can, for example, train open weight models in our Ontology, those models are valuable, and you have beyond frontier capacity without losing the alpha, you just are hooked. What we have to do internally is figure out how to resource our company to focus exclusively on those people because we don't have even the bandwidth to do that.

So -- but that's because like every single time we go into the conference, like in the past, you would be -- we go into a conference and people are like warm leads turn into hot leads. This is like first date into bed, kind of thing. Maybe it's not the right metaphor for this, but it's like -- it's a very different jam. It's like we've got this way, we've gone from being the most attractive person in the physics department to being the captain of the football team, kind of thing. I mean, not that I did that. But this is like a completely different jam of like what's going on.

And then it's also different on our end because we know we can deliver on use cases no one else can deliver on. So like even today, we're going over a use case after use case with like a super made with like one of the most important companies, and I'm going to go see them. And basically, it's like I'm going to into saying, hey, which is like let's just get started. You have this crucial problem for your business. We know we can deliver on this in weeks. This will change the trajectory of your business.

And it's -- in a weird way, it's much, much closer to what we were doing in the beginning in the U.S. government where we were like, hey, we're just going to get started we knew we could prove it with PG and then we -- but it's like at a much more massive scale. So instead of being like $250,000, it's like $25 million to start. And honestly, the general vibe is if this actually works, it's worth of infinite value and it will work. And quite frankly, I do not see how other offerings are going to work, because this is both product and artistry.

It's not -- that's why these numbers are so bombastic. It's not like some static like when Shyam's on the front line doing implementations or Ryan is structuring these I mean, Ryan was open in the last couple of days of last quarter, he couldn't get out of his car. We were like -- we're like -- I was about to send over a bottle, so he could like, take care of nature. It's like that on the front line. I'm not exaggerating. It's like, Ryan was on his way to work. And like you had to pull over -- he drives a fancy car. I mean look at that. But he literally had to pull over. And that's just what's going on.

But again, I know like the primary focus of your interest here is financial, but there's the flip side. The other stuff is not working. That's part of -- it's not just that our thing is unique. There's a very strong sense in the market that these other approaches, fake deploy codes, token, raw usage, lightweight companies reselling tokens, software companies that are reselling tokens and accounts as revenue. People are just tired of it.

And I'll tell you, last not least, the taste of the market is shifting. Like, people really do grow to like what works. I mean, look at the success in the Department of War. It's like -- that was a -- we shifted the taste. That's what's happening in U.S. com. That's what's explaining the numbers. And that's what -- if you -- like people watching this, you should come to one of our AIP Sovereign, it's a little bit like a rock concert.

Ana Soro

Our next question is from Gil with D.A. Davidson.

Gil Luria

I want to build on that conversation you had with Dan. You talked to them about one type of CEO, the one that comes to you with an urgency around sovereignty. But as reading the Anthropic S1, will tell us about half of their customers work directly with Anthropic. So when you have a -- which means there's a lot of CEOs that haven't gotten the message.

To your point, you're in the first inning of this conversation. When you get a CEO that's still unconvinced, what kind of analogies and metaphors can you use to help them understand the importance of this diffusion layer? Orchestration harness is coming from you and not directly from the lab. What kind of examples you have to provide and to understand the risk?

Alexander Karp

There's 2 parts to your question, which is like the person who's not convinced or not yet convinced and then what do we do? The weird thing here, though, is we really cannot satiate demand. So this is a market that is growing so rapidly. We don't need the people who aren't convinced. We really don't.

And by the way, and again, I say this every time, Dario is someone I get along very well with. I think he's one of the most important business people of my generation, if not multiple generations. They are also selling our product because people interact with them. And again, some people want that approach. But a lot of people are super concerned about their alpha being transferred to them. And the results -- even the results they talk about are often already in our application, I think.

We work very effectively within Anthropic and the Department of War, and at AIG, and all over the place. But again, the primary -- what they are doing is increasing the size of the market. What we're doing is servicing the market that's gotten real. And we are actually in the symbiotic relationship with them commercially because they're growing the market is probably much, much bigger than it will be than it is today. And we're taking advantage of the market where you really need delivery, where delivery also includes.

Now if there is somebody -- we don't -- we really do convincing in the government space. Like, we've been on the front line, like, certain agencies didn't want to adopt, and we knew that warfighters would die if they didn't enough, so we went to convince them. In commercial, our real approach is hey, enjoy the 1 year with until you just find out it's not the one you want. There are very, very, very few times where we're trying to go and compete and take their customer away. It really is not happening.

And conversely, once you go Palantir, you don't go back. And that's just -- that's how it is. And you can see it in our numbers, which is -- so it's -- this is a very different thing. I don't know at what point we become competitive with each other. But at this point in the U.S., the market for us is insatiable. It's insatiable and growing and growing and growing.

There's 2 ways to look at our numbers. One is to say we are just supplying at what we do. Another way is to say we're very unique in the market is exploding around us. I'm much more in the latter camp. Like I don't -- we are a creative colony. We're not perfect. But the market is exploding around us, and they are helping it explode.

And the only area where we do anything that looks competitive is we are spending a lot of time educating clients, partners that may -- that are nonpartners around the risks of using closed models without an application layer. That's the one thing we do, do actively. So -- but we're not really saying, hey, you're going to -- the value creation people know we own. Certainly an industry. I think less on Wall Street.

Actually, honestly, I think on Wall Street, I don't mean you, but I think really what happened on Wall Street is everybody invested in these firms early. Plus you guys, it's hard to see the reality when you're getting rich on something that's not actually working the way you think it is. And the reality is though, an industry, people realize when it gets real, you need us. And that market is much larger than we can service.

Ana Soro

Our last question is from Brad with Deutsche Bank.

Brad Zelnick

Congrats on another rocket ship quarter. Alex, in your shareholder letter, you said that you see Palantir as the pioneers of a genuine and viable anti-war movement. Can you expand on what that means and what it might mean for your government business?

Alexander Karp

Well, one of -- and I'll let Shyam talk about this. I'll go back to the beginning of our Palantir [ P.J. ]. And we build products that would protect civil liberties and stop terrorism. For the very simple reason that you don't want to do one or the other, if you don't stop terrorism, you're going to get a radical fringe on the right. If you stop terrorism without rights, none of us want that, okay?

You could say it's an anti-terror product or you could say it's a product for social cohesion. It's this product -- our products are built to avoid war, meaning the adversary knows that they will have such pain inflicted upon them, that in fact, it's not worth going to war. And also, to create social cohesion because we're going to bring back our troops healthier, safer, non-damaged and that makes our society much more effective.

And I would say as a person, not as like Palantir, I grew up as a lefty. I don't actually like war. I want to avoid war. I do not support wars. Sometimes they are necessary. And when they are necessary, America's allies need the very, very, very best tools. And we have competitors, adversaries and enemies out there. They need to know our stuff works. The way to stop a war is for them to know these things work.

And also, part of the problem with -- that we've had in the AI discussion in this country is we do have a rival and adversary on the battlefield. I happen to respect their culture quite a bit, China. But it is us or them. And they have a dynamic, interesting, super high IQ, scaled culture that is doing exceedingly well at AI. And we've got to make sure we're the leaders.

And somehow, we have to drag our European and other allies with us, which is going to be hard because they're going to have to also learn how these things work, and that probably means a real interaction with the leader of the sovereign movement, not some fake bureaucratic thing made up by people who have no idea talking about and think you can regulate these things like a telecom industry when, in fact, this is galvanizing a new transformative technology that is transforming every part of society and transforming our numbers and everything it touches.

Ana Soro

Thank you. Alex, as always, we have a lot of individual investors.

Alexander Karp

Somebody else has got to talk.

Ana Soro

Is there anything, anyone would like to say before I end the call?

Alexander Karp

Maybe you guys can say a couple of words. Shyam, would you like to say...

Shyam Sankar

Well, I mean, you spoke about deterrence really well. I guess I would just add that, of course, the objective is to deter conflict. Deterrence is not something you accomplish by hope. You actually have to build it brick by brick. And so on one end, in the fox hole, that's about having a capability that's 10x or 100x better than your adversary, should they choose to fight, they're going to lose, and therefore, they should not choose to fight. And on the other end, it comes out of the factory floor.

Deterrent conflict, as we've seen with Russia and Ukraine, is really about your ability to produce the material. And we are in a period where we need to reinvent how we do production. We've gone through 30, 40 years of essentially deindustrialization in the nation beyond just their defense industrial base. And the work that we're doing with war machine and working with commercial and private and public sector companies in order to enable production using a modern American manufacturing stack. These are 2 parts of the same coin here. And I think it comes down to, yes, freedom driven through the fox hole, but also prosperity, the growth of the American economy on the back of that.

Alexander Karp

You want to say something? Would you like to talk about your great...

Ryan Taylor

I'll just add the Sovereign AI revolution. We launched this last quarter and the FELP version on the ground is -- and what we're seeing at Sovereign AI boot camps when we actually show and don't tell, is the momentum and the urgency of customers that get it and see it, adopting quickly, moving quickly, moving with urgency because they realize how much it matters. And we're feeling that on the ground and we're at the very beginning of this, and we only see that continuing and expanding from here.

Shyam Sankar

And because I can't help myself, I'll say one more thing, going back to Gil's question. I mentioned this earlier in my comments, but it really is the case. And I think one of the concedes that the labs don't have right, and that perhaps the customers who don't quite yet realize that the return is not there, is that the atomic unit of the enterprise is not the knowledge worker.

You can make people more productive and generate no actual return on investment. If you're measuring the inputs, it can feel really good to see that productivity of the person. You actually -- the atomic unit is the workflow. And having a platform like AIP, where you're already managing your supply chain or your S&OP or your key enterprise processes, the exhaust of those processes then enable you to go through the post-training loop to have a model that's better than Frontier at that.

We give you the tools to elegantly integrate your people, your AI and the software to actually drive objective, quantifiable value against the workflow. This is the compounding loop that the customers who are coming to us in the Sovereign boot camps really understand. Just at our most recent DevCon down in Miami, we had a customer who on their stack in production as a hackweek project, built a production-ready model that's better than Frontier for their use case in the 48 hours. Single person in the 48 hours, that was DevCon. So the proof is everywhere on this.

David Glazer

And I guess 2 financial metrics to leave you with, I'd say, 2 years ago, on net income into today, we've 8x-ed our net income over the last 2 years, which I am incredibly proud of as well as everything else that was said. And also as we look at sort of this year, to basically guide to almost $5 billion in cash flow for the full year is, I think, something we all can be excited about.

Alexander Karp

And to close, I just -- the people who invested in us early, many of them were investing their own money and would otherwise be called retail and many now and recently have reinvested in us. The sovereign revolution is a metaphor for your interaction with Palantir. And the fact that we've been able to help you, and you've been able to help us in your own wealth creation in our journey, and that you've defended us against would obviously now look like ridiculously stupid and malicious incredibly hard to understand attacks, is something that we will never forget.

And part of the delivery here, part of what motivates me, is helping to make sure we are fighting for you and quite frankly, making sure that the people that made fun of you and made fun of us are suffering. And I'm very proud of that, and I'm very proud to have all of you along with us, and thank you for that support.

Ana Soro

Thank you. That concludes today's call.