-
Revenue: $634 million, up 21% year-over-year.
-
Net Income: GAAP net income of $106 million.
-
Earnings Per Share (EPS): GAAP EPS of $0.04, Adjusted EPS of $0.08.
-
Free Cash Flow: $149 million in adjusted free cash flow.
-
Customer Count: Grew to 554 customers, up 42% year-over-year.
-
Commercial Revenue: $299 million, up 27% year-over-year.
-
U.S. Commercial Revenue: $150 million, up 40% year-over-year.
-
Government Revenue: $335 million, up 16% year-over-year.
-
U.S. Government Revenue: $257 million, up 12% year-over-year.
-
International Government Revenue: $79 million, up 33% year-over-year.
-
Adjusted Operating Margin: Expanded to 36%.
-
Rule of 40 Score: Increased to 57 from 54 in the previous quarter.
Release Date: May 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Palantir Technologies Inc (NYSE:PLTR) reported a strong revenue increase of 21% year-over-year, reaching $634 million in Q1 2024, driven by the momentum of AIP and robust performance in the U.S. commercial sector.
-
The company has successfully expanded its U.S. government business, with revenue growing 8% quarter-over-quarter, highlighting the critical impact of its products on current world events.
-
Palantir Technologies Inc (NYSE:PLTR) secured a significant contract with the U.S. Army, valued at over $178 million, to be the sole prime contractor for a next-generation targeting node under the TITAN program.
-
The company continues to see rapid customer growth and expansion, with a 69% year-over-year increase in U.S. commercial customers and significant deal conversions shortly after customer boot camps.
-
Palantir Technologies Inc (NYSE:PLTR) achieved its sixth consecutive quarter of GAAP profitability, with a record GAAP net income of $106 million in Q1 2024, demonstrating strong financial health and operational efficiency.
Negative Points
-
Despite strong growth in the U.S., Palantir Technologies Inc (NYSE:PLTR) faces continued headwinds in Europe, with a sequential revenue decline in the international commercial sector due to challenging market conditions.
-
The company anticipates a decline in revenue from strategic commercial contracts in Q2 2024, projecting a decrease to between $7 million and $9 million compared to $19 million in Q2 2023.
-
While the U.S. commercial sector shows robust growth, the international government revenue declined 9% sequentially, reflecting revenue catch-up from Q4 and ongoing challenges in Europe.
-
Palantir Technologies Inc (NYSE:PLTR) is planning to increase expenses starting from Q2 through the back half of the year, which could impact profit margins if not managed against revenue growth effectively.
-
The company’s outspoken stance on geopolitics has led to internal disagreements and departures, posing potential risks to company culture and public perception.
Q & A Highlights
Q: How does your AI strategy differ from your competitors? A: (Shyam Sankar – CTO & Executive VP) Our AI strategy is unique because we focus on turning unstructured data into structured actions that drive economic value, unlike competitors who may not have the infrastructure to support such transformations. We enable builders within enterprises to quickly leverage AI, significantly reducing the time required for tasks, such as reducing a 6-hour targeting process to just 10 seconds.
Q: Can you discuss the conversion rates from boot camps to signed deals? A: (Ryan D. Taylor – Chief Revenue Officer & Chief Legal Officer) The boot camps have significantly compressed deal cycles, allowing us to demonstrate the platform’s capabilities within days and leading to rapid conversions to signed deals, often in the seven-figure range. This approach has led to a 94% year-over-year increase in deals in the U.S. commercial sector.
Q: What are your plans for tackling increased demand and supporting a larger customer base? A: (Shyam Sankar – CTO & Executive VP) We are focusing on enabling customers to become builders themselves, using our platforms to tackle a wide range of use cases independently. This strategy is supported by providing extensive resources like tutorials and quick starts, which empower customers to implement solutions without needing direct intervention from Palantir.
Q: How has Palantir’s outspoken stance on geopolitics been received? A: (Alexander C. Karp – Co-Founder, CEO & Director) While there have been internal disagreements, our clear stance on supporting Western values and U.S. allies with superior products has resonated well with our customers. This alignment with our core values and mission has been crucial to our success and growth, particularly in the U.S. commercial and government sectors.
Q: What impact has the AIP boot camps had on your business growth? A: (Ryan D. Taylor – Chief Revenue Officer & Chief Legal Officer) The AIP boot camps have been transformative, allowing us to showcase the platform’s capabilities and accelerate the sales process. This has resulted in significant growth in customer acquisition and deal closures, demonstrating the effectiveness of this go-to-market strategy.
Q: How do you differentiate Palantir’s AI products in a competitive market? A: (Alexander C. Karp – Co-Founder, CEO & Director) Palantir stands out because of our unique ability to integrate large language models with enterprise data ecosystems through our Foundry and Apollo platforms. This integration allows us to deliver functional AI solutions that are not just theoretical but provide tangible value and operational improvements to our clients.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.