Palantir Technologies Inc. (PLTR)

Palantir Technologies Inc. builds software that empowers organizations to effectively integrate their data, decisions, and operations at scale. The company was founded in 2003 and started building software for the intelligence community in the United States to assist in counterterrorism investigations and operations, later expanding to commercial enterprises. The company has built four principal software platforms: Palantir Gotham, Palantir Foundry, Palantir Apollo, and the Artificial Intelligence Platform (AIP). Foundry is the foundational data operations platform providing core capabilities for data management, logic authoring, systemic mapping development through the Palantir Ontology, analytics, and workflow development. AIP is the generative AI platform providing secure connectivity to third-party-provided large language models, a development toolchain for building AI-powered agents and automations, an array of AI-enabled end user applications, and a broad evaluations framework for governing AI workflows in production. Apollo is the continuous delivery platform enabling the orchestration of upgrades of services and assets every day to manage the underlying infrastructure that hosts the other platforms. Gotham integrates with the other platforms and broader defense offerings to power missions across allied defense and intelligence operations. The Ontology serves as the heart of the platforms by activating data and analytics inside operations, enabling real-time connectivity between data, analytics, and operational teams, as well as AI.

The company faces intense competition in its markets, fundamentally competing with the internal software development efforts of potential customers, who often attempt to build their own data platforms before turning to buy Palantir's. Competitors include large enterprise software companies, government contractors, system integrators, emerging companies, and established companies that have entered this market. The principal competitive factors include platform capabilities and product functionality, data security and privacy, ease and speed of adoption, product innovation, pricing and cost structures, customer experience, and brand awareness and reputation. The company believes it generally competes favorably based on these factors, though some competitors have greater name recognition, longer operating histories, larger customer bases, larger sales and marketing budgets, broader relationships, wider geographic presence, lower costs, larger intellectual property portfolios, and substantially greater financial resources. The company's customer acquisition strategy generally targets large-scale, hard-to-execute opportunities at large government and commercial institutions, where high installation costs, high failure risks, complexity of data environments, and long sales cycles raise barriers to entry for competition.

The company generates revenue from the sale of subscriptions to access its software platforms in its hosted environment along with ongoing operations and maintenance services (Palantir Cloud), software subscriptions in customers' environments with ongoing O&M services (On-Premises Software), and professional services. Revenue is generally recognized ratably over the contract term. The company generally offers contract terms of one to five years in length, though customers sometimes enter into shorter-term contracts. Many customer contracts contain termination for convenience provisions. As of December 31, 2025, the company had 954 customers. Of the $4.5 billion in revenue generated in 2025, 54% came from customers in the government segment and 46% came from customers in the commercial segment. The company earned 74% of its revenue from customers in the United States and 26% from those abroad. The average revenue for the top twenty customers during the trailing twelve months ended December 31, 2025 was $93.9 million ¹, up from $64.6 million ² in 2024.

The company's government segment primarily serves customers that are U.S. government and non-U.S. government agencies. For the year ended December 31, 2025, government segment revenue was $2,402,287 thousand ³. The government segment includes customers such as the U.S. Food and Drug Administration, Centers for Disease Control and Prevention, and National Institutes of Health, each treated as a separate customer. Gotham is used broadly across government functions, integrating with other platforms and broader defense offerings to enable users to see, understand, and act in the modern battlespace. The company continues to believe it is uniquely positioned to provide commercially available software to the U.S. federal government and intends to capture an even greater share of U.S. federal government spending on software systems.

The company's commercial segment primarily serves customers working in non-government industries. For the year ended December 31, 2025, commercial segment revenue was $2,073,159 thousand ⁴. Foundry is used by all commercial customers and transforms the ways organizations operate by creating a central operating system for their interconnected data, logic, and action. The company has developed and is continuing to develop partnerships in industries such as airline, space, shipbuilding, insurance, healthcare, telecommunications, automotive, security and risk management, and government. The company has entered into channel sales relationships and strategic alliances with various global system integrators and cloud partnerships with leading providers of public, private, and hybrid cloud services, including Amazon Web Services and Microsoft Azure.

During the year ended December 31, 2025, the company repurchased 600,446 ⁵ shares of its Class A common stock under the Share Repurchase Program for an aggregate amount, including commissions, of $75.0 million ⁶. The Share Repurchase Program was terminated in January 2026. The company has a secured revolving credit facility that provides for aggregate revolving commitments of $500.0 million ⁷ and matures in March 2027, with no outstanding debt balances as of December 31, 2025. The company entered into a strategic global partnership with Fujitsu Limited through Palantir Technologies Japan KK, incorporating the capabilities of Foundry and AIP as a key element in the data infrastructure for Fujitsu Uvance. The company also created a jointly-owned entity in South Korea with HD Hyundai Co. Ltd. in December 2022 in which it has a controlling interest. The total value of Strategic Commercial Contracts was $326.1 million ⁸ as of December 31, 2025, with cumulative revenue recognized from these contracts of $321.5 million ⁹, of which $15.3 million ¹⁰ was recognized during the fiscal year ended December 31, 2025.

For the year ended December 31, 2025, total revenue was $4,475,446 thousand ¹¹, reflecting a 56% growth rate from $2,865,507 thousand ¹² in 2024. Net income attributable to common stockholders was $1,625,033 thousand ¹³ for 2025, compared to $462,190 thousand ¹⁴ in 2024. Diluted earnings per share attributable to common stockholders was $0.63 ¹⁵ for 2025, compared to $0.19 ¹⁶ in 2024. Income from operations was $1,414,015 thousand ¹⁷ for 2025, compared to $310,403 thousand ¹⁸ in 2024. Gross profit was $3,686,269 thousand ¹⁹ for 2025, reflecting a gross margin of 82% ²⁰, compared to gross profit of $2,299,517 thousand ²¹ and a gross margin of 80% ²² in 2024. Net cash provided by operating activities was $2,134,473 thousand ²³ for 2025, compared to $1,153,865 thousand ²⁴ in 2024.

The company's growth strategy includes expanding access to its platforms through AIP bootcamps, which allow delivery of real workflows on actual customer data in days, and the Developer Tier offering providing limited access to Foundry and AIP in the United States and select countries. The company intends to continue to form joint ventures and new business partnerships where specific industries or sectors require a partner and additional investment. The company has entered into channel sales relationships and strategic alliances with various global system integrators, providing more diverse go-to-market opportunities and access to a wider base of potential customers. The company also continues to explore the development of partnerships with leading providers of public, private, and hybrid cloud services, which have relationships with essentially every major enterprise in the world and have large existing sales forces. The company expects that U.S. customers will continue to be a source of significant revenue growth, with revenue from U.S. customers during the trailing twelve months ended December 31, 2025 of $3.3 billion ²⁵, which grew 75% from the prior twelve-month period.

The company's growth strategy also includes expanding into new commercial markets and customer verticals, including banking, financial services, healthcare, pharmaceutical, manufacturing, telecommunication, automotive, airlines and aerospace, consumer packaged goods, insurance, retail, transportation, shipping and logistics, energy, mining, and other emerging industries. The company has increased its focus on new technologies such as AI. The company is developing industry operating systems to help companies and government agencies manage operations across their entire organizations, with partnerships in industries such as airline, space, shipbuilding, insurance, healthcare, telecommunications, automotive, security and risk management, and government. The company intends to expand its reach in both commercial and government markets moving forward. The total remaining deal value as of December 31, 2025 was $11.2 billion ²⁶, up 105% from $5.4 billion ²⁷ as of December 31, 2024, with $6.8 billion ²⁸ from commercial customers and $4.4 billion ²⁹ from government customers.

The company anticipates that operating expenses will continue to increase in the future as it expands its business, industry verticals, and breadth of operations, upgrades infrastructure, hires additional employees, expands into new markets, invests in research and development, invests in sales and marketing, leases more real estate, and incurs costs associated with general administration. The company expects that cost of revenue will increase in absolute dollars as revenue grows and will vary from period to period as a percentage of revenue. The company expects that sales and marketing expenses will increase in absolute dollars as it continues to invest in potential and current customers, growing its business, its sales force, and enhancing brand awareness. The company expects that research and development expenses will increase in absolute dollars for the foreseeable future as it continues to invest to support these activities. The company expects that general and administrative expenses will increase in absolute dollars as it hires additional personnel and enhances systems, processes, and controls to support growth and continuing compliance and reporting requirements as a public company.

The company's research and development function is responsible for the design, development, testing, validation, and refinement of its platforms, with many current efforts focused on deploying software, models, and other critical assets at the edge, including integrations with complex hardware and operations in disconnected environments. The company has made and will continue to make significant investments in research and development to broaden platform capabilities, strengthen existing platforms, and innovate. The company relies on the technology, infrastructure, and software applications of certain third parties such as AWS and Microsoft Azure to host or operate some or all of certain key technology platform features or functions. The company has a purchase commitment with a third-party cloud services provider to spend at least $1.95 billion ³⁰ over ten contract years through September 30, 2033. As of December 31, 2025, the company had 4,429 ³¹ full-time employees, 28% of whom are employed outside of the United States.

The company's research and development expenses were $557,677 thousand ³² for the year ended December 31, 2025, compared to $507,878 thousand ³³ in 2024. The company's capital expenditures for property and equipment were $33,882 thousand ³⁴ for the year ended December 31, 2025, compared to $12,634 thousand ³⁵ in 2024. In August 2023, the Board of Directors authorized a stock repurchase program of up to $1.0 billion ³⁶ of the company's outstanding shares of Class A common stock. During the year ended December 31, 2025, the company repurchased 600,446 ³⁷ shares for $75.0 million ³⁸ under this program, which was terminated in January 2026. The company has never declared or paid any cash dividends on its capital stock and does not expect to pay any dividends in the foreseeable future. The company's credit facility contains restrictions on its ability to pay dividends.

The company faces structural headwinds including that a significant portion of its business depends on sales to the public sector, and failure to receive and maintain government contracts or changes in contracting or fiscal policies could adversely affect its business. Government customers are subject to uncertainties regarding budgets and spending levels, changes in timing and spending priorities, and regulatory and policy changes. Many of the company's customer contracts may be terminated by the customer at any time for convenience, and government contracts often contain provisions with additional rights and remedies favorable to such customers. The company's sales efforts involve considerable time and expense, with a sales cycle that often lasts six to nine months but can extend to a year or more for some customers. The company faces intense competition from large enterprise software companies, government contractors, system integrators, and emerging companies, many of which have substantially greater financial, technical, and other resources.

The company faces risks related to macroeconomic conditions including geopolitical tensions such as the ongoing Russia-Ukraine conflict and the conflict in the Middle East, fluctuating interest rates, monetary policy changes, foreign currency fluctuations, and the potential or actual imposition of tariffs or other impacts on trade relations. The company's non-U.S. operations subject it to additional risks including increased management costs, longer payment cycles, difficulties in enforcing contracts, the need to adapt platforms for non-U.S. customers, differing regulatory requirements, compliance with multiple foreign laws, heightened risks of unfair business practices, volatility in political and economic environments, weaker intellectual property protection, currency exchange rate fluctuations, and potentially adverse tax consequences. The company does not work with the Chinese communist party and has chosen not to host its platforms in China, which may limit its growth prospects.

Management's message emphasizes that the company builds software that empowers organizations to effectively integrate their data, decisions, and operations at scale. The company generated $4.5 billion in revenue for the year ended December 31, 2025, reflecting a 56% growth rate from the prior year. Income from operations was $1.4 billion ⁴², or adjusted income from operations of $2.3 billion ⁴³ when excluding stock-based compensation and related employer payroll taxes. Gross profit was $3.7 billion ⁴⁴, reflecting a gross margin of 82% ⁴⁵, or 84% ⁴⁶ when excluding stock-based compensation. The company had 954 customers as of December 31, 2025, up from 711 customers as of December 31, 2024. The average revenue for the top twenty customers during the trailing twelve months ended December 31, 2025 was $93.9 million ⁴⁷, up 45% from $64.6 million ⁴⁸ in 2024. The total remaining deal value was $11.2 billion ⁴⁹ as of December 31, 2025, up 105% from $5.4 billion ⁵⁰ as of December 31, 2024. Management emphasizes that the company's focus in the short term remains making its software platforms available to an increasingly broad swath of the potential market, and that the speed with which platforms can be deployed has significantly expanded the range of potential customers. Management also emphasizes that the company continues to believe government customers remain a meaningful source of revenue, particularly during periods of economic uncertainty, and that U.S. customers will continue to be a source of significant revenue growth.

For the fiscal year ended December 31, 2025, total revenue was $4,475,446 thousand ⁵¹, compared to $2,865,507 thousand ⁵² in 2024. Net income attributable to common stockholders was $1,625,033 thousand ⁵³ for 2025, compared to $462,190 thousand ⁵⁴ in 2024. Diluted earnings per share attributable to common stockholders was $0.63 ⁵⁵ for 2025, compared to $0.19 ⁵⁶ in 2024. Income from operations was $1,414,015 thousand ⁵⁷ for 2025, compared to $310,403 thousand ⁵⁸ in 2024. Gross profit was $3,686,269 thousand ⁵⁹ for 2025, reflecting a gross margin of 82% ⁶⁰, compared to gross profit of $2,299,517 thousand ⁶¹ and a gross margin of 80% ⁶² in 2024. Net cash provided by operating activities was $2,134,473 thousand ⁶³ for 2025, compared to $1,153,865 thousand ⁶⁴ in 2024. As of December 31, 2025, the company had cash, cash equivalents, and short-term U.S. Treasury securities totaling $7.2 billion ⁶⁵, with no outstanding debt balances under its $500.0 million ⁶⁶ revolving credit facility. The government segment generated revenue of $2,402,287 thousand ⁶⁷ for 2025, and the commercial segment generated revenue of $2,073,159 thousand ⁶⁸ for 2025. Stock-based compensation expense totaled $684,033 thousand ⁶⁹ for 2025, compared to $691,638 thousand ⁷⁰ in 2024.

The company may not be able to sustain its revenue growth, as revenue growth rate has fluctuated in the past and may continue to fluctuate due to factors including macroeconomic conditions, increased competition, slowing demand, terminations of existing contracts, and the maturation of the business. A limited number of customers account for a substantial portion of revenue, with the top three customers together accounting for 16% ³⁹ and 17% ⁴⁰ of revenue for the years ended December 31, 2025 and 2024, respectively, and these customers have been with the company for an average of ten years as of December 31, 2025. The company may not realize the full deal value of its customer contracts, as total remaining deal value of $11.2 billion ⁴¹ as of December 31, 2025 is subject to termination for convenience provisions and the U.S. federal government is prohibited from exercising contract options more than one year in advance. The company's sales cycle is often long and unpredictable, typically lasting six to nine months but can extend to a year or more, and sales efforts involve considerable time and expense with no guarantee of success. The company faces intense competition from large enterprise software companies, government contractors, and system integrators, many of which have substantially greater financial, technical, and other resources, and may be able to sell at zero or negative margins, bundle products, or offer closed technology platforms.