(Bloomberg) — Palantir Technologies Inc. reported its fourth straight quarterly profit, its highest revenue since its founding 20 years ago, citing strong demand for its new artificial intelligence products, marking a nearly six-month period of profit. This was a huge increase.
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The Denver-based data analytics firm said Thursday it expects adjusted operating profit this year to be in the range of $607 million to $611 million, compared with the average analyst estimate of $577 million. It was announced that it exceeded the The company also said it expects 2023 sales to be about $2.22 billion, narrowly exceeding analyst expectations. Shares rose as much as 23% to $18.30, the biggest intraday gain since May.
Palantir, known for its work with intelligence agencies and billionaire co-founder Peter Thiel, posted net income of $72 million and revenue of $558 million for the quarter that ended Sept. 30, a 17% increase. It was reported that.
“This is the strongest return in our company’s 20-year history,” Palantir CEO Alex Karp said in a letter to shareholders Thursday. “These results qualify us for inclusion in the S&P 500, a milestone we have been working toward and knew was within our reach.”
Palantir has long been criticized on Wall Street for relying too much on engineers who customize software for individual customers, but Palantir has been automating more tasks in recent years. Karp said in his letter that revenue per employee has nearly doubled over the past four years.
Palantir’s stock price has fallen since the company announced high demand for its AI products earlier this year with the debut of a new product called an “artificial intelligence platform.” Karp said this summer that the tool is so powerful that he doesn’t even know if he should sell it to some customers.
Palantir has made progress faster than before in helping customers set up its products, Chief Legal Officer and Chief Revenue Officer Ryan Taylor said in an interview. Instead of trials that allow users to try out its technology, the company is increasingly hosting “boot camps” to train potential customers and convert them into paying subscribers. What used to take him three months can now be accomplished in one to five days, Taylor said.
Palantir plans to train 70 organizations in boot camps in November alone, which is more than all the pilots the company completed last year, Karp said on a conference call with analysts. Karp said the bootcamp approach has been so effective in customer acquisition that Palantir believes he could achieve $1 billion in revenue by 2025.
The company’s number of U.S.-based commercial customers increased 37% in the third quarter to 181 companies. Meanwhile, commercial revenue increased by 23% to $251 million.
This outpaced revenue growth from government customers, which rose 12% to $308 million. The company’s revenue from the government fell short of analysts’ expectations of $319 million.
David Glaser, Palantir’s chief financial officer, said in an interview that the slowdown in government spending in the third quarter reflects “short-term uncertainty” related to budgeting.
The company’s software has been used by the Ukrainian Defense Forces since the Russian invasion, and the company has been operating in Israel for more than a decade.
Karp called the October attack on Israel by Hamas “terrorism” and said Palantir fully supports Israel and continues to support its efforts. “We are on the front lines fighting what amounts to evil,” Karp said.
Palantir ended the quarter with $3.3 billion in cash, cash equivalents, and short-term U.S. Treasury securities.
(Updates stock offering and executive comments)
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