Palantir Q3 Revenue Jumps 96% as US Commercial Sales Pass Government

Palantir Technologies Inc. (NASDAQ: PLTR) nearly doubled quarterly revenue in the third quarter of 2026 as rapid expansion in its U.S. business pushed U.S. commercial revenue above U.S. government revenue for the first time. The software company also reported a 47% GAAP operating margin and projected fourth-quarter revenue of $2.649 billion to $2.653 billion.

Revenue rose 96% year over year and 20% sequentially to $2.31 billion. U.S. revenue increased 119% from a year earlier and 23% from the second quarter to $1.94 billion, accounting for most of the company’s quarterly sales.

U.S. commercial revenue climbed 148% year over year and 29% sequentially to $984 million, exceeding U.S. government revenue of $953 million. The government figure was up 96% year over year and 18% sequentially.

Across all markets, commercial revenue increased 113% to $1.17 billion, while government revenue rose 81% to $1.15 billion. Palantir attributed the momentum in its U.S. commercial business to continued adoption of its Artificial Intelligence Platform, or AIP.

Profitability and cash generation

GAAP operating income reached $1.08 billion, representing a 47% operating margin. GAAP net income attributable to common stockholders was $1.13 billion, and diluted GAAP earnings per share was $0.44.

Adjusted operating income, which excludes stock-based compensation and related employer payroll taxes, totaled $1.43 billion, for a 62% adjusted operating margin. Adjusted diluted EPS was also $0.44. Palantir’s adjusted gross profit was $1.97 billion, equivalent to an 85% adjusted gross margin.

Cash flow from operating activities reached $1.20 billion, or 52% of revenue. Adjusted free cash flow was $1.22 billion, representing a 53% margin, compared with $540 million and a 46% margin in the prior-year quarter. The adjusted measure excludes employer payroll taxes related to stock-based compensation and purchases of property and equipment.

Palantir ended the quarter with $10.4 billion in cash, cash equivalents and U.S. Treasury securities and no debt.

Commercial expansion and contract activity

The company’s U.S. commercial customer count increased 29% year over year to 686, based on organizations from which Palantir recognized revenue during the trailing 12 months. Net dollar retention reached 165%, up eight percentage points sequentially, indicating higher trailing-12-month revenue from the existing customer base.

Palantir closed 212 deals valued at $1 million or more during the quarter. Of those, 107 were worth at least $5 million and 64 were valued at $10 million or more. The company defines deal value as total contract value, including existing contractual obligations and unexercised options available to customers.

Billings were $2.45 billion, up from $1.23 billion a year earlier. Total remaining performance obligations stood at $4.90 billion at quarter-end, including $2.81 billion classified as short term. RPO represents non-cancelable contracted revenue that has not yet been recognized, subject to the company’s stated accounting exclusions for certain contracts with original terms of 12 months or less.

Palantir highlighted deployments spanning commercial and government customers, including work involving NVIDIA’s supply chain, Hexion’s manufacturing operations and the Federal Aviation Administration’s safety systems. It also said the U.S. Army awarded the company a prime agreement to produce eight TITAN AI-enabled ground stations, moving that program from prototype to production.

Fourth-quarter and full-year outlook

For the fourth quarter, management expects revenue of $2.649 billion to $2.653 billion and adjusted income from operations of $1.640 billion to $1.644 billion.

For full-year 2026, Palantir projects revenue of $8.530 billion to $8.534 billion and adjusted income from operations of $5.245 billion to $5.249 billion. Adjusted free cash flow is expected to range from $4.8 billion to $5.0 billion.

The company expects U.S. commercial revenue to exceed $3.559 billion for the year, representing growth of at least 143%. It also expects to report GAAP operating income and net income in each quarter of 2026.

Palantir said it plans to continue investing aggressively in AIP and its U.S. operations while pursuing operating leverage. Its outlook remains subject to substantial risks and uncertainties, including execution of its product, distribution and pricing strategies, customer and partnership developments, macroeconomic conditions, and assumptions surrounding AIP and Sovereign AI. The company cautioned that actual results could differ materially from its forward-looking statements.