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Palantir Reports Positive Q2 2025 Results

Summary

Original Article

DENVER–(BUSINESS WIRE)– Palantir Technologies Inc. (NASDAQ:PLTR) today announced financial results for the second quarter ended June 30, 2025.

“This was a phenomenal quarter. We continue to see the astonishing impact of AI leverage. Our Rule of 40 score was 94%, once again obliterating the metric. Year-over-year growth in our U.S. business surged to 68%, and year-over-year growth in U.S. commercial climbed to 93%. We are guiding to the highest sequential quarterly revenue growth in our company’s history, representing 50% year-over-year growth,” said Alex C. Karp, Co-Founder and Chief Executive Officer of Palantir Technologies.

Q2 2025 Highlights

U.S. revenue grew 68% year-over-year and 17% quarter-over-quarter to $733 million
- U.S. commercial revenue grew 93% year-over-year and 20% quarter-over-quarter to $306 million
- U.S. government revenue grew 53% year-over-year and 14% quarter-over-quarter to $426 million
Revenue grew 48% year-over-year and 14% quarter-over-quarter to $1.004 billion
Closed 157 deals of at least $1 million, 66 deals of at least $5 million, and 42 deals of at least $10 million
Closed a record-setting $2.27 billion of total contract value (“TCV”), up 140% year-over-year
- Closed a record-setting $843 million of U.S. commercial TCV, up 222% year-over-year
U.S. commercial remaining deal value (“RDV”) of $2.79 billion, up 145% year-over-year and 20% quarter-over-quarter
Customer count grew 43% year-over-year and 10% quarter-over-quarter
GAAP income from operations of $269 million, representing a 27% margin
Adjusted income from operations of $464 million, representing a 46% margin
Rule of 40 score of 94%
GAAP net income of $327 million, representing a 33% margin
Cash from operations of $539 million, representing a 54% margin
Adjusted free cash flow of $569 million, representing a 57% margin
GAAP earnings per share (“EPS”) of $0.13
Adjusted EPS of $0.16
Cash, cash equivalents, and short-term U.S. Treasury securities of $6.0 billion

Unaudited)(Amounts in thousands, except percentages and per share amounts)	Second Quarter
	Amount
Revenue			$	1,003,697
Year-over-year growth				48	%

	Amount		Margin
Income from Operations	$	269,317		27	%
Adjusted Income from Operations	$	464,385		46	%
Cash from Operations	$	539,251		54	%
Adjusted Free Cash Flow	$	568,769		57	%
Net Income Attributable to Common Stockholders	$	326,727		33	%
Adjusted Net Income Attributable to Common Stockholders	$	404,551
Adjusted EBITDA	$	470,915		47	%
GAAP EPS, Diluted	$	0.13
Adjusted EPS, Diluted	$	0.16

Outlook

For Q3 2025, we expect:

Revenue of between $1.083 – $1.087 billion.
Adjusted income from operations of between $493 – $497 million.

For full year 2025:

We are raising our revenue guidance to between $4.142 – $4.150 billion.
We are raising our U.S. commercial revenue guidance to in excess of $1.302 billion, representing a growth rate of at least 85%.
We are raising our adjusted income from operations guidance to between $1.912 – $1.920 billion.
We are raising our adjusted free cash flow guidance to between $1.8 – $2.0 billion.
And we continue to expect GAAP operating income and net income in each quarter of this year.

Foundational software of tomorrow. Delivered today. Additional information is available at https://www.palantir.com.

Palantir Technologies Inc.Condensed Consolidated Statements of Operations(in thousands, except per share amounts)(unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
		2025		2024			2025		2024
Revenue	$	1,003,697	$	678,134		$	1,887,552	$	1,312,472
Cost of revenue⁽¹⁾		192,934		128,562			365,904		244,818
Gross profit		810,763		549,572			1,521,648		1,067,654
Operating expenses:
Sales and marketing⁽¹⁾		243,788		196,809			480,097		389,986
Research and development⁽¹⁾		135,043		108,781			269,932		218,821
General and administrative⁽¹⁾		162,615		138,643			326,254		272,627
Total operating expenses		541,446		444,233			1,076,283		881,434
Income from operations		269,317		105,339			445,365		186,220
Interest income		56,255		46,593			106,696		89,945
Other income (expense), net		6,596		(11,173	)		3,423		(24,680	)
Income before provision for income taxes		332,168		140,759			555,484		251,485
Provision for income taxes		3,596		5,189			9,195		9,844
Net income		328,572		135,570			546,289		241,641
Less: Net income attributable to noncontrolling interests		1,845		1,444			5,531		1,985
Net income attributable to common stockholders	$	326,727	$	134,126		$	540,758	$	239,656
Earnings per share attributable to common stockholders, basic	$	0.14	$	0.06		$	0.23	$	0.11
Earnings per share attributable to common stockholders, diluted	$	0.13	$	0.06		$	0.21	$	0.10
Weighted-average shares of common stock outstanding used in computing earnings per share attributable to common stockholders, basic		2,365,196		2,231,592			2,356,983		2,222,569
Weighted-average shares of common stock outstanding used in computing earnings per share attributable to common stockholders, diluted		2,562,912		2,414,696			2,557,911		2,407,402

⁽¹⁾	Includes stock-based compensation expense as follows (in thousands):

		Three Months Ended June 30,				Six Months Ended June 30,
			2025		2024		2025		2024
	Cost of revenue	$	14,973	$	12,402	$	29,989	$	22,818
	Sales and marketing		56,040		48,314		108,553		90,470
	Research and development		32,068		29,943		63,902		56,817
	General and administrative		56,890		51,105		112,866		97,310
	Total stock-based compensation	$	159,971	$	141,764	$	315,310	$	267,415

Palantir Technologies Inc.Condensed Consolidated Balance Sheets(in thousands)(unaudited)

	As of June 30,			As of December 31,
		2025			2024
Assets
Current assets:
Cash and cash equivalents	$	929,547		$	2,098,524
Marketable securities		5,070,875			3,131,463
Accounts receivable, net		747,484			575,048
Prepaid expenses and other current assets		142,487			129,254
Total current assets		6,890,393			5,934,289
Property and equipment, net		43,523			39,638
Operating lease right-of-use assets		203,474			200,740
Other assets		228,298			166,217
Total assets	$	7,365,688		$	6,340,884
Liabilities and Equity
Current liabilities:
Accounts payable	$	10,774		$	103
Accrued liabilities		393,623			427,046
Deferred revenue		376,784			259,624
Customer deposits		262,994			265,252
Operating lease liabilities		45,465			43,993
Total current liabilities		1,089,640			996,018
Deferred revenue, noncurrent		44,638			39,885
Customer deposits, noncurrent		1,491			1,663
Operating lease liabilities, noncurrent		192,347			195,226
Other noncurrent liabilities		12,008			13,685
Total liabilities		1,340,124			1,246,477
Palantir’s stockholders’ equity:
Common stock		2,372			2,339
Additional paid-in capital		10,568,473			10,193,970
Accumulated other comprehensive income (loss), net		4,721			(5,611	)
Accumulated deficit		(4,646,665	)		(5,187,423	)
Total Palantir’s stockholders’ equity		5,928,901			5,003,275
Noncontrolling interests		96,663			91,132
Total equity		6,025,564			5,094,407
Total liabilities and equity	$	7,365,688		$	6,340,884

Palantir Technologies Inc.Condensed Consolidated Statements of Cash Flows(in thousands)(unaudited)

	Six Months Ended June 30,
		2025			2024
Operating activities
Net income	$	546,289		$	241,641
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		13,152			16,494
Stock-based compensation		315,310			267,415
Unrealized and realized (gain) loss from marketable securities, net		(452	)		20,042
Noncash consideration		(24,441	)		(26,484	)
Other operating activities		26,533			11,351
Changes in operating assets and liabilities:
Accounts receivable, net		(163,501	)		(298,311	)
Prepaid expenses and other assets		(7,307	)		2,797
Accounts payable and accrued liabilities		48,202			22,824
Contract liabilities		120,666			33,269
Other liabilities		(24,937	)		(17,272	)
Net cash provided by operating activities		849,514			273,766
Investing activities
Purchases of property and equipment		(13,818	)		(5,543	)
Purchases of marketable securities		(2,576,231	)		(1,784,115	)
Proceeds from sales and redemption of marketable securities		652,762			1,133,535
Purchases of privately-held securities		(70,000	)		(4,000	)
Net cash used in investing activities		(2,007,287	)		(660,123	)
Financing activities
Proceeds from the exercise of common stock options		95,201			99,870
Repurchases of common stock		(36,594	)		(26,699	)
Taxes paid related to net share settlement of equity awards		(81,117	)		—
Other financing activities		63			102
Net cash provided by (used in) financing activities		(22,447	)		73,273
Effect of foreign exchange on cash, cash equivalents, and restricted cash		11,518			(4,948	)
Net decrease in cash, cash equivalents, and restricted cash		(1,168,702	)		(318,032	)
Cash, cash equivalents, and restricted cash – beginning of period		2,119,936			850,107
Cash, cash equivalents, and restricted cash – end of period	$	951,234		$	532,075

Palantir Technologies Inc.Reconciliation of GAAP to Non-GAAP Financial Measures(unaudited)

Non-GAAP Reconciliations

*Adjusted Income from Operations and Adjusted Operating Margin (in thousands, except percentages)*

	Three Months Ended June 30,						Six Months Ended June 30,
		2025			2024			2025			2024
Income from operations	$	269,317		$	105,339		$	445,365		$	186,220
Add: stock-based compensation		159,971			141,764			315,310			267,415
Add: employer payroll taxes related to stock-based compensation		35,097			6,464			94,420			26,390
Adjusted income from operations	$	464,385		$	253,567		$	855,095		$	480,025
Adjusted operating margin		46	%		37	%		45	%		37	%

*Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin (in thousands, except percentages)*

	Three Months Ended June 30,
		2025			2024
Net cash provided by operating activities	$	539,251		$	144,187
Add: cash paid for employer payroll taxes related to stock-based compensation		37,152			7,352
Less: purchases of property and equipment		(7,634	)		(2,879	)
Adjusted free cash flow	$	568,769		$	148,660
Adjusted free cash flow margin		57	%		22	%

*Adjusted EBITDA and Adjusted EBITDA Margin (in thousands, except percentages)*

	Three Months Ended June 30,
		2025
Net income attributable to common stockholders	$	326,727
Add: net income attributable to noncontrolling interests		1,845
Less: interest income		(56,255	)
Add: other (income) expense, net		(6,596	)
Add: provision for income taxes		3,596
Add: depreciation and amortization		6,530
Add: stock-based compensation		159,971
Add: employer payroll taxes related to stock-based compensation		35,097
Adjusted EBITDA	$	470,915
Adjusted EBITDA margin		47	%

*Adjusted Net Income Attributable to Common Stockholders and Adjusted Earnings Per Share, Diluted (in thousands, except per share amounts)*
	Three Months Ended June 30,
		2025
Net income attributable to common stockholders	$	326,727
Add: stock-based compensation		159,971
Add: employer payroll taxes related to stock-based compensation		35,097
Less: income tax effects and adjustments⁽¹⁾		(117,244	)
Adjusted net income attributable to common stockholders	$	404,551
Weighted-average shares used in computing GAAP earnings per share, diluted		2,562,912
Weighted-average shares used in computing adjusted earnings per share, diluted		2,562,912
Adjusted earnings per share, diluted	$	0.16

Income tax effect is based on an estimated long-term annual effective tax rate of 23.0% for the period presented.

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