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Palantir’s Revenue Topped Estimates. It’s a Shame About the Earnings Miss.

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Signage for Palantir Technologies outside the company’s headquarters in Palo Alto, California.

David Paul Morris/Bloomberg


Palantir Technologies

stock was dropping even after posting better-than-expected revenue growth in the fourth quarter, and offering first-quarter guidance that topped Wall Street estimates, as earnings fell short.

For the fourth quarter, Palantir (ticker: PLTR) reported revenue of $433 million, up 34% from a year ago, and ahead of the company’s target at $418 million. The company earned 2 cents a share on an adjusted basis in the quarter, two pennies shy of Street estimates. Under generally accepted accounting principles, the company lost 8 cents a share in the quarter.

The data analytics software company said fourth-quarter commercial revenue was up 47%, including 132% growth in the U.S. commercial business. Government contract revenue rose 26%. Palantir said it closed 64 deals of $1 million or more in the quarter, 27 deals of $5 million or more, and 19 deals of $10 million or more.

For the full year, the company posted revenue of $1.54 billion, an increase of 41%. Commercial revenue was $645 million, up 34%, while government revenue was $897 million, up 47%.

In an interview with Barron’s, Palantir Chief Operating Officer Shyam Sankar noted that the company’s U.S. commercial business doubled in 2021 for the second year in a row. He also noted that commercial revenue growth accelerated throughout 2021; he said the company now has 80 U.S. commercial customers, up from 17 a year ago. The U.S. commercial business is now 13% of revenue, more than doubling over the last two years.

Sankar said the growth reflects a buildout of the company’s U.S. sales organization, adding 175 people in 2021. He expects to build a direct sales force in Europe in 2022.

Palantir forecasts first-quarter revenue of $447 million, a little ahead of the Wall Street consensus forecast of $439 million, with adjusted operating margin of 23%, down from 29% in the fourth quarter. The company sees full-year operating margin of 27%, down from 31% in 2021. Sankar said the lower projected operating margins reflect expectations of both a return by more employees to the company’s offices and increased corporate travel.

Palantir reiterated its forecast for annual revenue growth of 30% or better through 2025.

Asked about the company’s strategy last year of investing in private-equity rounds connected with companies going public via SPAC mergers, Sankar said Palantir has slowed the practice as the SPAC market has gone quiet. But he added that the company still sees opportunities to invest in smaller companies that are adopting Palantir’s Foundry software platform. 

Palantir stock has fallen 12% to $12.32 in premarket trading Thursday after falling 1.4%, to $13.97 on Wednesday.

Write to Eric J. Savitz at eric.savitz@barrons.com

Palantir revenue tops expectations but earnings fall short

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