• Revenue Growth: 36% year over year in Q4; 29% for the full year 2024.
• US Business Revenue Growth: 52% year over year in Q4.
• US Commercial Revenue Growth: 64% year over year in Q4; 54% for the full year.
• US Government Revenue Growth: 45% year over year in Q4.
• Adjusted Operating Margin: 45% in Q4, the strongest in company history.
• Adjusted Free Cash Flow: $517 million in Q4; $1.25 billion for the full year, representing a 44% margin.
• Customer Count Growth: 43% year over year to 711 customers.
• Top 20 Customers Revenue: $65 million per customer, a 18% year over year increase.
• Commercial TCV Booked: $995 million in Q4, a 42% year over year growth.
• US Commercial TCV Booked: $803 million in Q4, a 134% year over year growth.
• International Government Revenue Growth: 28% year over year in Q4.
• Net Dollar Retention: 120%, an increase of 200 basis points from last quarter.
• Total Remaining Deal Value: $5.43 billion, a 40% year over year increase.
• Adjusted Gross Margin: 83% for Q4 and the full year.
• GAAP Net Income: $79 million in Q4; $462 million for the full year.
• GAAP Earnings Per Share: $0.03 in Q4; $0.19 for the full year.
• Adjusted Earnings Per Share: $0.14 in Q4; $0.41 for the full year.
• Cash and Equivalents: $5.2 billion at the end of Q4.
• Q1 2025 Revenue Guidance: $858 million to $862 million.
• Full Year 2025 Revenue Guidance: $3.741 billion to $3.757 billion.
• Warning! GuruFocus has detected 8 Warning Signs with PLTR.

Release Date: February 03, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

• Palantir Technologies Inc (NASDAQ:PLTR) reported a 36% year-over-year revenue growth in Q4 2024, exceeding prior guidance by over 900 basis points.
• The US business showed significant strength, with a 52% year-over-year growth in Q4, driven by both commercial and government sectors.
• Palantir Technologies Inc (NASDAQ:PLTR) achieved a Rule of 40 score of 81 in Q4, indicating strong revenue growth combined with profitability.
• The company closed $1.8 billion in total contract value (TCV) in Q4, marking a 56% increase year over year.
• Palantir Technologies Inc (NASDAQ:PLTR) reported an exceptional cash flow quarter with adjusted free cash flow of $517 million, representing a margin of 63%.
• International commercial revenue growth was relatively modest at 3% year over year in Q4.
• Revenue from strategic commercial contracts is expected to decline significantly in Q1 2025.
• The European market showed slower growth, with only 4% growth on 13% of the company’s business.
• Palantir Technologies Inc (NASDAQ:PLTR) faces challenges in expanding its presence in Europe due to cultural and strategic differences.
• The company anticipates a more significant increase in expenses in 2025 as it invests in technical hires and product pipeline.

Q: What is so unique about the ontology? How does it give you an edge over your competitors, and why wouldn’t any of them be able to recreate something similar? A: Shyam Sankar, Executive Vice President, Chief Technology Officer, explained that ontology is essential for building software that works across various industries and government sectors. It acts as an intermediary representation that makes enterprises accessible to AI in a secure and governed manner. Alexander Karp, CEO, added that building such a system requires deep understanding and secure access to enterprise data, which Palantir uniquely possesses.

Q: How will the new Chinese AI model DeepSeek impact Palantir, and how can Palantir mitigate its impact? A: Shyam Sankar noted that the commoditization of AI models is evident, and the real challenge is the AI arms race with China. He emphasized the need for a whole-of-nation effort to win this race, highlighting that the engineering in DeepSeek is impressive, and the U.S. must respect its adversaries while realizing the urgency of the situation.

Q: Are you surprised at how quick these sales cycles are actually taking place from when a customer first meets Palantir to now deploying AI initiatives? A: Ryan Taylor, Chief Revenue Officer, stated that the rapid deployment is not surprising due to the tangible impact and energy felt from customers. Alexander Karp added that the pragmatic approach of American companies contrasts with slower adoption in Europe, highlighting the effectiveness of Palantir’s solutions.

Q: How is Palantir positioned to handle disruption, such as changes in administration or focus on efficiencies? A: Shyam Sankar expressed optimism, stating that Palantir thrives in disruption by exposing inefficiencies and delivering results. He emphasized that Palantir’s competition is the lack of accountability in government projects, and the company is well-positioned to bring meritocracy and transparency.

Q: Where does Palantir invest to ensure it can execute on increasing demand? A: David Glazer, CFO, mentioned that the focus is on quality engineering talent. Alexander Karp highlighted the importance of maintaining Palantir’s unique culture and attracting individuals who think differently, which is crucial for building impactful products.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.