Palantir Technologies Inc. (NASDAQ: PLTR) reported third-quarter revenue of $2.31 billion on Monday, its first quarter above $2 billion and ahead of analysts' expectations, as revenue from US businesses overtook US government revenue for the first time in the company's history. Total revenue rose 96% from a year earlier, while net income more than doubled to $1.13 billion.
Analysts had expected third-quarter revenue of $2.18 billion, according to LSEG data. The data-analytics software maker also forecast fourth-quarter revenue of $2.649 billion to $2.653 billion, above the $2.46 billion analysts had expected, and raised its full-year forecast for the third time this year. Even so, shares fell nearly 3% in extended trading after the release.
"We have now essentially doubled our entire business since the same quarter last year," Chief Executive Alex Karp said in a letter to shareholders. Chief Financial Officer Dave Glazer said on a conference call that the 96% rise was the company's highest year-over-year growth rate as a public company.
#US Commercial Sales Overtake Government Revenue at Palantir
Revenue from US commercial customers rose 148% to $984 million, edging past US government revenue, which grew 96% to $953 million. Together, US sales rose 119% to $1.94 billion, about 84% of Palantir's total third-quarter revenue.
Palantir built its business on government and defense work and develops the Maven Smart System used by NATO's military headquarters and several European armed forces. The company says recent commercial growth reflects demand for what it calls sovereign AI, which it describes as letting businesses keep control of their data and of how AI models are used on it.
Palantir closed 212 deals worth at least $1 million in the quarter, including 64 worth at least $10 million. Many of the largest were shorter than the company typically signs.
"We signed multiple eight-figure deals in the quarter that were shorter in duration than usual as customers rapidly adopted initial Sovereign AI capabilities in their enterprise," Glazer told analysts on the call, adding that Palantir expects both the length and size of these contracts to increase over time.
#Palantir Raises 2026 Revenue Forecast to Up to $8.534 Billion
Palantir now expects 2026 revenue of $8.53 billion to $8.534 billion, up from $8.15 billion to $8.158 billion previously, implying growth of about 91%. It raised its forecast for US commercial revenue to more than $3.559 billion, which would be growth of at least 143%.
The company also lifted its full-year forecasts for adjusted operating income, to $5.245 billion to $5.249 billion, and for adjusted free cash flow, to $4.8 billion to $5 billion.
Margins widened in the quarter. Adjusted operating margin was 62%, up from 51% a year earlier, and GAAP operating income passed $1 billion for the first time at $1.09 billion. Palantir ended September with $10.4 billion in cash, cash equivalents and US Treasury securities.
Adjusted expenses rose 53% from a year earlier to $887 million, which Glazer attributed to continued investment in the company's AI platform and technical hiring.
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#Slower Contract Growth and Capacity Limits Remain Risks to the Outlook
Growth in new US commercial contracts slowed sharply. US commercial total contract value rose 11% year over year to $1.46 billion, a sharp slowdown from the more than 153% annual growth recorded in the second quarter. Total contract value across the company rose 6% to $2.92 billion.
US commercial remaining deal value, the value left on existing contracts, rose 79% to $6.52 billion. Palantir notes that most of its contracts can be terminated, including for convenience, and that customers may not exercise contract options.
Karp said demand from new customers was running ahead of the company's ability to serve them. "What we have to do internally is figure out how to re-resource our company to focus exclusively on those people, because we don't have even the bandwidth to do that," he told analysts.
Palantir expects fourth-quarter adjusted operating income of $1.64 billion to $1.644 billion and continues to expect positive GAAP operating income and net income in every quarter of 2026, though shorter contract terms, slower growth in new US commercial bookings and limits on its capacity to take on customers remain key risks to that outlook.