Palantir's blowout quarter: $2.31B revenue, but short-term deals

Palantir posted third-quarter revenue of $2.31 billion, up 96% from a year earlier and 20% from the previous quarter. Analysts had expected $2.18 billion. It was the first time the company cleared $2 billion in a single quarter.

Adjusted earnings per share came in at 44 cents, against expectations of 41 cents. Palantir also raised its full-year revenue guidance. According to TechCrunch · AI, the press release described the results as beating consensus expectations.

US commercial revenue reached $984 million, up 148% from the year-ago quarter. That topped US government revenue of $953 million for the first time ever.

Enterprises are signing up for AI software that runs frontier models and custom-trains open-weight models without sharing data or business processes with outside AI labs. Palantir also offers "forward-deployed" engineering, where its own engineers work directly with customers to customize the software.

CEO Alex Karp told analysts that enterprises are moving faster but signing short-term trials. He described quicker deployment and shorter contract duration, with the ability to expand later.

Corporations are willing to try AI software quickly, skipping the usual bureaucracy, but they are also more willing to cancel contracts. Karp said on the call that once customers go Palantir, they don't go back.

Palantir closed $1.46 billion in total contract value from US enterprises in the quarter. That is a decline from the record $2.13 billion in the previous quarter.

The company raised guidance for US commercial revenue to more than $3.559 billion, a growth rate of at least 143%. The next earnings report will show whether Palantir has solidified its role as a rising US enterprise AI provider.

Historically, many enterprises sign their biggest tech purchases in the final quarter of the year. That makes the next report the one to check for whether the short trials turn into larger contracts.

For now, the quarter shows strong revenue and a first in the commercial-versus-government split, alongside a drop in US enterprise contract value from the prior record.