💰 Market Cap: $490B | 🏢 3.9K Employees | 🌍 Global (U.S. 75% of Revenue)

👨‍💼 CEO Alex Karp | 🎯 AI Platform (AIP) Dominance | 🇺🇸 Denver, Colorado

$201.15

📉 -$6.03 (-2.91%) After-Hours

+167% YTD | Profit-Taking After Initial Pop

🚀 Needs:

U.S. commercial revenue maintains 100%+ growth through 2026 as AIP becomes enterprise standard • Government contracts expand with new $15B+ in defense/intelligence awards • International commercial accelerates to 50%+ growth as global AI adoption surges • Operating margins expand to 45%+ as scale benefits kick in • Multiple enterprise partnerships announced (Fortune 500 adoption rate hits 40%+) • AIP platform fee revenue model scales to $2B+ annually

⚖️ Needs:

U.S. commercial growth moderates to 60-80% range as market matures • Government revenue grows 35-45% with stable defense spending • International business shows steady improvement to 25-35% growth • Rule of 40 maintains 90-110% range through operational efficiency • Customer acquisition continues at 35-40% annual pace • Free cash flow conversion stays above 40% of revenue • Management delivers on $6.5-7B revenue by end of 2026

⚠️ Risk:

AI hype cycle deflates as enterprises delay large-scale deployments due to ROI concerns • Commercial growth decelerates sharply to 30-40% as competition intensifies from Microsoft, Google, Snowflake • Government shutdown impacts contract renewals and new awards (55% of revenue at risk) • Customer concentration risk materializes with top 20 clients reducing spend • Operating expenses surge faster than revenue as hiring continues • Stock-based compensation dilution accelerates (currently ~$500M quarterly) • Valuation multiple compresses to software sector average as growth normalizes

💰

What Happened

Revenue Blowout: $1.18B actual vs $1.09B expected (+8% beat), up 63% YoY - exceeded high-end guidance by 1,300bps

EPS Dominance: $0.21 adjusted vs $0.17 expected (+24% beat), GAAP EPS $0.18 (tripled from $0.06 YoY)

Deal Flow Explosion: Record TCV $2.8B (+151% YoY) with 204 deals >$1M closed (including 53 deals >$10M each)

Commercial Rocket: U.S. commercial $397M (+121% YoY, +29% QoQ) with $1.3B TCV (6x growth on dollar-weighted duration basis)

Profitability Beast: Net income $476M (40% margin), adjusted operating margin 51% (record), exceeded guidance by 500bps

📈

Why It Matters

C-Suite Transformation: Enterprises reorganizing entire operations around AIP - CEO quote: "arguably the best results that any software company has ever delivered"

Enterprise-Wide Deployments: Customers converting from pilots to full implementations in 5 months (medical device maker increased ACV 8x after initial contract)

AIFDE Revolution: AI-powered development agents migrating legacy data warehouses in 5 days (vs 2 years with traditional SIs) - driving 63% revenue growth with only 10% headcount increase

Net Dollar Retention 134%: Up 600bps QoQ, doesn't yet capture full velocity of past 12 months (excludes new customer revenue acquired in trailing year)

Army Consolidation: U.S. Army issued official memo directing all Army organizations to consolidate on Palantir's OnVantage platform (Army Data Platform)

🎯

What's Next

Q4 Guidance Crushed: $1.329B revenue (61% YoY, 13% QoQ) - highest sequential quarterly revenue growth guide in company history

Full Year Raised $252M: $4.398B revenue (53% YoY) up from $4.146B prior guide - U.S. commercial guidance raised 19pts to 104%+ growth

Operating Leverage: Full year Rule of 40 guided to 102% with adjusted operating income $2.151-2.155B

FCF Acceleration: Raised adj FCF guidance to $1.9-2.1B (43-48% margin) - achieved $2B TTM adj FCF milestone for first time

Sales Cycle Velocity: CFO noted customers converting to "larger enterprise agreements in short time frames" with expanding scope - 83 U.S. commercial deals >$1M (40 deals >$5M, 21 deals >$10M)

💡

Bottom Line for Retail Investors

CEO Alex Karp didn't hold back: "These are arguably the best results that any software company has ever delivered" - and the numbers back up the swagger. Yet the stock closed after-hours down 2.91% at $201.15, showing that even blowout quarters aren't enough when you're priced for perfection. The 121% U.S. commercial growth with declining sales headcount (up only 10% while revenue grew 63%) proves the "downstream value creation" model works: enterprises pay Palantir a cut of the value AIP creates. The call revealed C-suites reorganizing entire companies around AIP within months, with one medical device CEO expanding their contract 8x just five weeks after signing. At $201, you're still paying 85-90x forward sales, but Karp's pointed jabs at skeptical analysts who've "been wrong at every price" hit differently when you see 114% Rule of 40 off a massive base. The after-hours dip confirms the valuation concern: this is "private equity-like transformation in public markets," but the market is saying "show me more quarters like this before I pay $205+." For momentum traders, the -3% fade after a massive beat is a red flag. For long-term believers, it's a slightly better entry point into the dominant enterprise AI platform.

🤖

AIP Platform Moat

AIFDE Game Changer: AI-powered Forward Deployed Engineers migrating entire data warehouses in 5 days (2 human FDEs + AI army vs 2 years with traditional consultants) - now deployed to customers

AI HiveMind Launched: "Swarm of dynamically generated agents" orchestrating complex problem-solving integrated with Ontology - developed for classified missions, now commercialized

20-Year Moat: "Twenty years of grinding has built a unique moat and growing lead" - Ontology prerequisite for LLM value impossible to replicate quickly

FDE Orchestration: CTO confirmed competitors hiring FDEs don't understand the model: "It's just memetic" - Palantir's entire software stack built downstream of customer value creation

💼

Commercial Breakout

Enterprise Reorgs: Medical device CEO expanded ACV 8x after 5 months, evolved conversation from single use case to "AI-first enterprise" within 2 weeks of signing

C-Suite Ownership: Insurance company CEO taking "personal ownership of AI transformation, meeting with team regularly to orchestrate company-wide transformation around AIP"

$1.3B TCV Quarter: U.S. commercial closed 83 deals >$1M (40 deals >$5M, 21 deals >$10M) representing 6x growth on dollar-weighted duration vs year ago

American Tech Fellowship: Frontline workers (civil engineers, potato farmers, utility workers) building AI apps - customers now requesting their own fellowship programs (Lear highlighted in their earnings call)

🏛️

Government Fortress

Army Platform Mandate: U.S. Army issued official memo directing ALL Army organizations to consolidate on OnVantage (Palantir's Army Data Platform) - "cultural decision enabling data-driven decision-making"

Three Active Conflicts: CRO noted "America is involved with three conflicts right now" (Europe/Ukraine, Middle East, U.S. hemisphere) driving urgent demand for mission-critical software

Legacy Sunset Directive: Army memo enables "rapid sunset of legacy systems" to invest in future capabilities - Palantir positioned as modernization core

Warp Speed Expansion: Originally for new defense entrants, now "rapidly adopted across traditional defense industrial base and maritime industrial base" - solving production bottlenecks

📊

Financial Excellence

Rule of 40 Acceleration: 114% (63% growth + 51% adj op margin) - up 20 points from Q2's 94%, ninth consecutive quarter of expanding Rule of 40

Guidance Obliteration: Revenue exceeded high-end guidance by 1,300bps, adj op margin beat by 500bps - CFO noted "3,300 basis point increase compared to Q3 last year"

Cash Generation Machine: Q3 generated $508M cash from ops, $540M adj FCF (46% margin) - first time crossing $2B TTM adj FCF milestone

Operating Leverage Proof: Revenue grew 63% YoY while headcount grew only 10% and sales force declined - "downstream value creation" model scales without linear hiring

💸

Extreme Valuation

No Room for Error: Trading at ~90x forward revenue and P/E of 256x - CEO openly mocking skeptics "wrong at every price" suggests overconfidence risk

Karp's Combative Tone: Called detractors "left in deranged and self-destructive befuddlement" and told TV analysts "Get some popcorn. They're crying" - confrontational approach could alienate institutional investors

Wall Street Caution: 13 of 19 analysts rate "Hold" or "Sell" with average target $159 (-23% from current) - concerns about sustainability of growth

Retail Dependency: CEO emphasized retail investors achieving "venture-quality results" - heavy retail ownership could amplify volatility in downturn as momentum unwinds

⚔️

Intensifying Competition

Tech Giants Circling: Microsoft (Azure AI), Google (Vertex AI), Amazon (Bedrock) have infinite resources and enterprise relationships

Snowflake Threat: Data cloud leader building native AI capabilities directly into platform customers already use

Open Source Movement: LangChain, Hugging Face enabling companies to build in-house AI solutions at fraction of PLTR cost

Customer Bargaining Power: As AI tooling commoditizes, enterprise buyers may pressure pricing and push for multi-vendor strategies

🎭

AI Hype Cycle Risk

Karp Admits AI Excess: CEO told CNBC "there's excess in the AI market today and some companies are eventually going to feel the pain" - acknowledges bubble risk even while riding wave

Transformation Timeline: Call revealed customers expect "private equity-like transformation in months" in public markets - unrealistic expectations could lead to disillusionment

Early Adoption Phase: Many deals still converting from pilots (medical device example took 5 months) - mass enterprise adoption timeline uncertain

Competitive Response Coming: CRO noted customers "tried a lot of stuff" that "hasn't worked" before Palantir - implies competitors will improve offerings, increasing pressure

⚠️

Structural Vulnerabilities

Political Exposure: Karp's polarizing statements (defending ICE operations, calling critics "elite people" out of touch) could impact commercial sales in ESG-focused enterprises

Stock-Based Comp: Q3 SBC was $172M (15% of revenue) plus $35M payroll tax - ongoing dilution concern despite CFO excluding from adj metrics

Europe Stagnation: CEO noted "stagnant Europe...is still significant part of business" dragging down overall growth - international commercial up only 10% YoY

Customer Concentration: Top 20 customers now $83M TTM revenue each (+38% YoY) - growing dependence on largest accounts increases single-customer risk