Palantir Technologies Inc. Q4 FY2025 earnings call

Management Statement and Operational Highlights

• Ryan Taylor: Q4 results were historic with 70% YOY revenue growth, U.S. business at 77% of total revenue (up 93% YOY and 22% sequentially), Rule of 40 at 127%, and highest TCV quarter at $4.3 billion. Highlighted U.S. commercial business growth and customer conviction.
• Shyam Sankar: Discussed AIP, Hivemind, AI FDE, Maven's expansion, Gotham's integrated capabilities, and Warp Speed with ShipOS, emphasizing AI driving job creation and transforming various sectors.
• Dave Glazer: Detailed financials including Q4 adjusted operating income of $798 million (57% margin), full year adjusted operating income $2.254 billion (50% margin), and guidance for 2026 revenue at midpoint $7.190 billion, 61% growth YOY.

Segment Performance

• Overall: In Q4 2025, overall revenue surged 70% year-over-year to $1.407 billion. Full year 2025 revenue was $4.475 billion, up 56% year-over-year. The U.S. business commands 77% of total revenue, with Q4 U.S. revenue growing 93% year-over-year to $1.076 billion, and full year U.S. revenue reaching $3.320 billion, up 75% year-over-year.
• Commercial: Q4 commercial revenue grew 82% year-over-year to $677 million, with full year commercial revenue at $2.073 billion, up 60% year-over-year. U.S. commercial revenue in Q4 was $507 million, up 137% year-over-year, and full year U.S. commercial revenue was $1.465 billion, up 109% year-over-year. International commercial revenue in Q4 was $171 million, up 8% year-over-year, and full year international commercial revenue was $608 million, up 2% year-over-year.
• Government: Q4 government revenue grew 60% year-over-year to $730 million, with full year government revenue at $2.402 billion, up 53% year-over-year. U.S. government revenue in Q4 was $570 million, up 66% year-over-year, and full year U.S. government revenue was $1.855 billion, up 55% year-over-year. International government revenue in Q4 was $160 million, up 43% year-over-year, and full year international government revenue was $547 million, up 47% year-over-year.

Guidance

• Full year 2026 revenue guidance at midpoint $7.190 billion, representing 61% year-over-year growth.
• Q1 2026 revenue expected between $1.532 billion and $1.536 billion, with adjusted income from operations between $870 million and $874 million.
• Full year 2026 adjusted income from operations expected between $4.126 billion and $4.142 billion, adjusted free cash flow between $3.925 billion and $4.125 billion.

Risks

No detailed discussion of specific risks in the transcript, but general risks related to market adoption, competition, and operational challenges are inherent in business operations.

Question and Answer

Q: How are you thinking about your international business? And do you anticipate reacceleration in the near future, for instance, due to European rearmament?

A: Alexander Karp and Shyam Sankar discussed challenges in international markets outside the U.S., noting differences in adoption rates and the focus on servicing U.S. demand while acknowledging pressure on other regions to adapt.

Q: On the commercial side, the markets have already decided that 2026 is the show-me story for AI. Have you seen that in the customers or software partners? The other one is related to ShipOS. Shipbuilding has not been the only thing that the Pentagon has struggled to ramp up. There is a major effort to reindustrialize the U.S. and especially the military-related stuff. But like is there an opportunity to have like, I don't know, an ammo OS or a missile OS and like where else we could see that applied?

A: Ryan Taylor mentioned commercial go-to-market strategy showing value impact to customers, with many large deals closed. Alexander Karp and Shyam Sankar discussed ShipOS and potential for expanding Warp Speed to other military-related sectors like ammo and missile systems, leveraging reindustrialization efforts.