Palantir's revenue surged 70% year-on-year, full-year guidance far exceeds market expectations, stock price rises about 8% after hours | Earnings News
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Data analytics company Palantir released its fourth quarter results after the market closed on Monday, showing revenue exceeding market expectations, surging 70% year-on-year to $1.41 billion. Meanwhile, the company’s guidance for next quarter also beat expectations, coming in 15.3% higher than analysts’ estimates. The strong performance pushed Palantir’s stock price up about 8% in after-hours trading on Monday.
Key highlights from Palantir’s financial report:
Main Financial Data:
Revenue: $1.41 billion, higher than analysts’ forecast of $1.34 billion (year-on-year growth of 70%, beating expectations by 4.9%)
Government Contracts: Revenue from government purchases grew 66% year-on-year to $570 million, also surpassing analyst expectations of $522 million for this segment.
Commercial Contracts: Soared 137% year-on-year to $507 million, above market expectations of $479 million; total value of outstanding US commercial contracts grew 145% year-on-year to $4.38 billion.
Adjusted Earnings Per Share (EPS): $0.25, higher than analysts’ anticipated $0.23 (beating expectations by 8.6%)
Adjusted Operating Profit: $798.5 million, higher than analysts’ predicted $701.1 million (operating margin 56.8%, beating expectations by 13.9%)
Customer Count: Customer count grew 34% year-on-year, up 5% quarter-on-quarter.
Guidance:
Q1 Revenue: Revenue is expected to be between $1.532 billion and $1.536 billion, median higher than analyst forecast of $1.32 billion.
2026 Full Year Revenue: Company forecasts full-year revenue between $7.182 billion and $7.198 billion, also above FactSet’s expectation of $6.22 billion.
After the report was released, the stock rose about 8% in after-hours trading; earlier closing price was $147.77. Since its high in November last year, the stock has fallen 29%. As of close, shares are down 17% since the beginning of 2026.
Government Business Demand Surges, Controversy Over ICE Cooperation
Palantir mainly provides software to clients for aggregating, managing, and analyzing massive amounts of data. Riding the ongoing AI boom, the company’s profits have continually hit new highs. Over the past two years, shares have jumped nearly 800%, adding $315 billion to its market cap.
Media reports say Palantir's strong performance reflects robust demand for its AI technology from US government and commercial clients. Meanwhile, its role in assisting the Trump administration’s deportation agenda is facing increasing scrutiny.
A large portion of Palantir’s US revenue comes from government contracts, with government clients including US Immigration and Customs Enforcement (ICE), the IRS, and the Department of Defense. Palantir said last quarter’s revenue from US government contracts reached $570 million, up 66% year-on-year. Sales to US commercial clients were $507 million, more than double the previous year. Both figures outpaced analyst expectations.
Last month, the company signed a $448 million contract with the US Navy to provide better data support for maintenance and upgrades of nuclear submarines.
However, over the past year, criticism from current and former employees and elected officials over Palantir’s collaboration with ICE has cast a shadow over the stock's strong performance. ICE has contracted Palantir to use its technology to develop applications for locating and tracking immigrants targeted for deportation.
Since the Minneapolis immigration enforcement action was stepped up last month, leading to the deaths of two US citizens, condemnation has intensified. Palantir has publicly defended its collaboration with ICE.
Based on media analysis of government contract disclosures, since January 2025, Palantir has received $81 million in contracts from ICE. This includes a $30 million contract signed last April to establish a system to streamline "illegal immigrant screening and apprehension operations."
Valuation Concerns
The company’s CEO and co-founder Alexander Karp described Palantir’s accelerating revenue growth as “a cosmic-level return” for supporters in his shareholder letter. He said the company’s performance is “driven by a group of increasingly discerning US companies and institutions who truly understand the value of AI.”
He told the media,
“As far as I know, the best result in the tech industry over the past decade, hands down.”
“If you don’t spend money on this, you’re not investing in those who can keep up with growth momentum.”
Despite poor performance this year, the company’s $350 billion market cap still makes it one of the most highly valued stocks in the S&P 500.
Based on an analysis by media last November using inflation-adjusted FactSet market data (dating back to 1984), no other S&P 500 constituent has ever reached Palantir’s level of “valuation relative to revenue scale.”
At the end of last year, famed hedge fund manager Michael Burry, known for shorting mortgages in the late 2000s and for the movie "The Big Short," disclosed a bearish bet against Palantir. Burry also posted on social platform X warning about an AI bubble. Subsequently, as investors pulled out of AI stocks over valuation and bubble concerns, Palantir suffered its worst monthly performance in two years.
At that time, Karp called this move “utterly insane” in a media interview, accusing the existence of “market manipulation.”
In his letter to shareholders, Karp said that despite mounting pressure for AI companies to return to fundamentals, Palantir's profits remain “pure and not artificially engineered.”
He added that the company's commercial business has benefited from demand for software that provides structural support for large language models.
Karp wrote:
“Any company lacking a single-minded focus on the value created by these technical systems, and without a real capacity to ‘catch the mouse,’ will ultimately fade away and be forgotten.”
William Blair analyst Louis DiPalma on Monday upgraded Palantir’s rating from “market perform” to “outperform,” saying the previous pullback has made the company’s valuation “more reasonable.”
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