Palantir’s US commercial revenue overtakes government sales

Palantir’s US commercial revenue overtook its US government revenue for the first time in Q3. In his November 2 letter, CEO Alex Karp reported $984 million in US commercial sales, up 148% year-over-year. The milestone changes its American customer mix.

The company raised its full-year revenue forecast to $8.530 billion–$8.534 billion. It expects annual US commercial revenue to exceed $3.559 billion, representing growth of at least 143%.

The two customer groups had been in the opposite order one quarter earlier. Palantir’s August 3 presentation reported second-quarter US commercial revenue of $764 million and government revenue of $809 million. Its full-year revenue forecast then stood at $8.150 billion–$8.158 billion, providing the baseline for the latest increase.

Government sales also expanded. For the quarter ended September 30, US government revenue reached $953 million, up 96% year over year. Total US revenue rose 119% to $1.937 billion. Worldwide revenue increased 96% to $2.313 billion, passing $2 billion for the first time in a quarter.

AIP is the AI layer within Palantir’s enterprise software offering. Existing product documentation describes tools for connecting organizational data and operations to AI, then building agents and workflows on that foundation. It brings information from different sources and formats into the context used by language-model applications.

The documentation also specifies access controls, encryption, auditing and evaluation tools. Palantir describes running generative-AI applications within existing security and resource-management frameworks, with records that help trace AI operations. Model choice and version management are supported. Feature availability can change and differ between customers.

Contract awards and quarterly revenue reflect different timing. In its June-quarter filing, Palantir explains that revenue from subscriptions to its hosted cloud software is generally recognized ratably over the contract term. Software running on customer infrastructure or cloud instances is combined with essential maintenance and likewise recognized over the term.

Professional services include support, configuration, training and data modeling. The filing says these services are delivered and recognized over their related term. Quarterly sales therefore reflect the provision of software and support throughout a contractual period.

Newly closed total contract value reached $2.918 billion, up 6% year over year. Palantir defines it as potential lifetime contract value assuming customers exercise all options and do not terminate. The release says most contracts allow termination and options may go unexercised. Its growth rate measures something different from recognized revenue growth.

Karp identified US commercial business as a principal growth driver. He also said sales cycles that once took months or years can now take days or weeks. That is management’s account of its sales experience; the letter provides no customer-level distribution or comparison sample for the timing claim.

For the fourth quarter, Palantir forecasts revenue of $2.649 billion–$2.653 billion and adjusted operating income of $1.640 billion–$1.644 billion. The adjusted measure excludes stock-based compensation and related employer payroll taxes. Palantir expects GAAP operating and net profit each quarter.