Palantir expands AI and government contracts, securing another profitable year

ByInvestment Club

Overview

Palantir Technologies closed 2024 with record-breaking financial results, reporting $828m in Q4 revenue and $2.87bn in full-year revenue, driven by strong demand for its AI-powered software solutions. The company achieved $517m in adjusted free cash flow for Q4 and maintained GAAP profitability for the second consecutive year, with $462m in full-year net income.

CEO Alexander C. Karp highlighted Palantir’s expanding role in AI, stating: “Our business results continue to astound, demonstrating our deepening position at the center of the AI revolution. Our early insights surrounding the commoditization of large language models have evolved from theory to fact.”

Q4 2024 vs. Q4 2023:

  • Revenue rose to $828m (+36% YoY and +14% QoQ), driven by strong U.S. commercial and government contracts.
  • U.S. revenue experienced a significant increase to a value of $558m (+52% YoY and +12% QoQ), with commercial revenue growing to $214m (+64% YoY) and government revenue rising to $343m (+45% YoY).
  • Net income was $79m (GAAP, 10% margin), but excluding one-time stock appreciation rights (SAR) expenses, net income was $165m (20% margin).
  • Adjusted EPS reached a value of $0.07, reflecting improved profitability.
  • Adjusted free cash flow reached to $517m (63% margin), showcasing strong cash generation.
  • U.S. commercial total contract value (TCV) reached a record value of $803m (+134% YoY and +170% QoQ), fueled by growing adoption of Palantir’s AI-driven platforms.
  • Customer count grew 43% year-over-year and 13% quarter-over-quarter.

Full-Year 2024 performance:

  • Total revenue had a significant rise, reaching a value of $2.87bn (+29% YoY), with balanced growth across commercial and government segments.
  • U.S. revenue increased to a value of $1.9bn (+38% YoY), with commercial revenue at $702m (+54% YoY) and government revenue at $1.2bn (+30% YoY).
  • Net income was $462m (GAAP, 16% margin), with an adjusted EPS of $0.41, marking Palantir’s second consecutive profitable year.
  • Adjusted free cash flow was $1.25bn (44% margin), demonstrating strong operational cash efficiency.
  • Adjusted income from operations had a value of $1.13bn (39% margin), highlighting sustained profitability.
  • Remaining deal value (RDV) reached to a value of $1.79bn, nearly doubling YoY, signaling continued long-term demand.

For 2025, Palantir expects revenue to reach $3.74–$3.76bn, reflecting 31% year-over-year growth, driven by strong demand across both commercial and government sectors. U.S. commercial revenue is projected to exceed $1.08bn, fueled by increased adoption of Palantir’s AI platforms. The company anticipates adjusted income from operations between $1.55–$1.57bn, maintaining strong margins, while adjusted free cash flow is expected to range from $1.5–$1.7bn, reinforcing its ability to generate liquidity.

After the results were published, PLTR shares were trading at new historical highs in the after-market, their price increasing by almost 22% (at the time of writing this report) immediately after the results were announced, even exceeding the symbolic threshold of $100. After a very good year in which it experienced significant increases after the very good sentiments of investors, it seems that the beginning of this year also brings positive sentiments on Wall Street after analysts’ estimates were largely exceeded.

Source: TradingView

Author: Ionuț-Adrian Lazar

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