AI demand and U.S. contracts fuel record-breaking quarter
Palantir Technologies has reported its strongest quarter to date, surpassing $1 billion in revenue for the first time and raising its full-year guidance. The artificial intelligence software firm beat Wall Street expectations across the board, with shares rising 3% after hours on the news.
Adjusted earnings came in at 16 cents per share, above the 14 cents expected. Revenue climbed 48% to $1 billion, well ahead of the $940 million analysts had forecast. The milestone arrived earlier than anticipated, as most had projected the company would hit that figure by year-end.
Focus shifts to leaner operations
CEO Alex Karp highlighted the company’s intent to grow while trimming its workforce. “The goal is to get 10x revenue and have 3,600 people. We have now 4,100,” he stated in a CNBC interview. He did not confirm whether layoffs were planned to reach that target. The company is positioning itself as a hyper-efficient leader in AI, balancing scale with streamlined operations.
Palantir updated its 2025 revenue forecast to between $4.142 billion and $4.150 billion, up from its previous range of $3.89 billion to $3.90 billion. For the third quarter, it expects $1.083 to $1.087 billion in revenue, surpassing the $983 million estimate from analysts.
Government and commercial growth accelerate
The company’s revenue growth was fueled by surging demand from both public and private sectors. U.S. revenue jumped 68% to $733 million, with commercial sales nearly doubling to $306 million. Meanwhile, U.S. government revenue rose 53% to $426 million, driven by President Donald Trump’s administration’s push for contract optimization and efficiency.
Palantir signed 66 deals worth $5 million or more, and 42 of at least $10 million. Total contract value grew 140% year over year to $2.27 billion. Net income more than doubled to $326.7 million, or 13 cents per share, compared to $134.1 million, or 6 cents, a year earlier.
Stock hits new high despite valuation concerns
Palantir shares have soared in 2025, more than doubling on optimism around its AI capabilities and government partnerships. Its market cap has crossed $379 billion, placing it among the top 10 U.S. tech companies. The stock now trades at 276 times forward earnings, with Tesla being the only other top 20 firm with a triple-digit valuation multiple.
Last week, Palantir secured a $10 billion contract with the U.S. Army, further cementing its role as a key player in federal technology infrastructure. Despite concerns about lofty valuations, investor confidence in the company’s long-term AI strategy remains strong.
