Palantir Technologies Inc. Q1 FY2025 earnings call

• First quarter revenue grew 39% year-over-year, with US revenue making up 71% of the business. US commercial business had 71% year-over-year growth and surpassed $1 billion annual run rate in Q1. • AIP is focused on enterprise autonomy, enabling customers to build and deploy AI agents to automate the enterprise. AI agents are having transformative impacts in various sectors like insurance, defense, and healthcare. • Warp Speed, the modern American manufacturing operating system, has exceeded expectations in adoption and product development, powering America's reindustrialization. • Delivered first TITAN vehicles to the US army in Q1, on time and on budget, with Maven Smart System adoption growing rapidly, including NATO adopting its capabilities.

In the first quarter, revenue grew 39% year-over-year to $884 million. US revenue grew 55% year-over-year and now makes up 71% of the overall business. US commercial business revenue grew 71% year-over-year, with US commercial revenue in Q1 surpassing the $1 billion annual run rate, growing 19% sequentially. US government business achieved 45% year-over-year revenue growth. Commercial segment: First quarter commercial revenue grew 33% year-over-year to $397 million; US commercial revenue grew 71% year-over-year and 19% sequentially, closing $810 million in US commercial TCV with 239% year-over-year growth on dollar-weighted duration basis; international commercial revenue declined 5% year-over-year. Government segment: First quarter government revenue grew 45% year-over-year to $487 million; US government revenue grew 45% year-over-year, with first quarter TCV booked at $1.5 billion, up 66% year-over-year.

• For Q2 2025, expects revenue of between $934 million and $938 million, adjusted income from operations of between $401 million and $405 million. • For full year 2025, raises revenue guidance to between $3.89 billion and $3.902 billion; raises US commercial revenue guidance to an excess of $1.178 billion with at least 68% growth; raises adjusted income from operations guidance to between $1.711 billion and $1.723 billion; raises adjusted free cash flow guidance to between $1.6 billion and $1.8 billion.

• Government focus on reducing federal spend and US Department of Defense budget cuts may impact current and future contract acquisition, but company welcomes pressure on the system as it helps validate software value. • International commercial business, especially in Europe, faces headwinds with slower acceptance of AI, affecting revenue growth.

Q: How does Palantir plan to sustain its competitive advantage in AI, particularly in light of growing competition?

A: Our advantage comes down to ontology. It's an advantage on the AI demand side, and AIP is the platform that can capture the ever-expanding capability of raw LLMs and turn that into business value, supporting mixed human AI teams.

Q: How will the current US administration's focus on reducing federal spend as well as the February announcement of US Department of Defense budget cuts impact current contracts as well as future contract acquisition?

A: Welcome DOGE, we like pressure on the system. Pressure on the system forces questions like whether the software works, how it works, etc., and once results are seen, customers stick with us.

Q: Are you interested in applying Warp Speed as European countries build up their own defenses?

A: We would love to help Europe on manufacturing challenges around rearmament. Some European manufacturing companies are starting to recognize the need for Warp Speed, but it depends on the customer's mindset.

Q: Where else do you see opportunities for software to add value besides TITAN?

A: There are classified projects where the first step is to build the mission payload and software that can execute the thing and then work backwards to figure out the hardware, playing to the cultural impedance mismatch where software first is better.