EPS of $0.04 increased by 188.5% from previous year
Gross margin of 82.1%
Net income of 93.39M
""AIP and bootcamps are accelerating our business... we closed out the year with $608 million in fourth quarter revenue, representing a 20% year-over-year growth."" - Ryan Taylor
Palantir Technologies Inc (PLTR) Q4 2023 Financial Results: Strong Growth Driven by AIP and Expanding Commercial Market
Executive Summary
Palantir Technologies Inc delivered a strong performance in Q4 2023, reporting revenues of $608 million, marking a 20% increase year-over-year (YoY) and a 9% sequential rise. The company’s commercial business, bolstered by the success of its Artificial Intelligence Platform (AIP) and innovative go-to-market bootcamp strategy, drove a remarkable 70% growth in revenue within the U.S. commercial sector. Management emphasized a robust demand increase for AIP, revealing that new customer acquisitions rose sequentially by 22% due to successful bootcamp conversions. The year ended with significant cash flows and profitability improvements, positioning Palantir for substantial growth in FY 2024. Overall, the company's ability to generate over $300 million in free cash flow in Q4 reflects its strong operational health amidst an expanding market opportunity.
Key Performance Indicators
Revenue
608.35M
QoQ: 8.99% | YoY:19.61%
Gross Profit
499.71M
82.14% margin
QoQ: 10.99% | YoY:23.60%
Operating Income
65.79M
QoQ: 64.55% | YoY:469.09%
Net Income
93.39M
QoQ: 30.61% | YoY:202.45%
EPS
0.04
QoQ: 29.00% | YoY:188.51%
Revenue Trend
Margin Analysis
Key Insights
**Q4 2023 Revenue:** $608 million (20% YoY, 9% sequential)
**FY 2023 Revenue:** $2.23 billion (17% YoY)
**Net Income Q4 2023:** $93.39 million (15% margin)
**Operating Income Q4 2023:** $66 million (11% margin)
Market Expansion and AIP Growth:
- Ryan Taylor, Chief Revenue Officer: "AIP and bootcamps are accelerating our business, particularly in US commercial... we closed out the year with $608 million in fourth quarter revenue, representing a 20% year-over-year growth."
- Alex Karp, CEO: "The numbers... are extraordinary, with over 100 contracts exceeding $1 million. Our product’s ease of use driven by AI innovations has significantly driven our growth."
Strategic Customer Engagement and Partnerships:
- Shyam Sankar, CTO: "The demand for AIP is off the charts... we're seeing bootcamps convert quickly to paying customers. We also renewed major partnerships, solidifying our customer base in Europe and beyond."
"AIP and bootcamps are accelerating our business... we closed out the year with $608 million in fourth quarter revenue, representing a 20% year-over-year growth."
— Ryan Taylor
"The demand for AIP is off the charts... we're seeing bootcamps convert quickly to paying customers."
— Shyam Sankar
Forward Guidance
For Q1 2024, Palantir expects revenue between $612 million and $616 million, with FY 2024 revenue projected between $2.652 billion and $2.668 billion, driven largely by a targeted growth in U.S. commercial revenue exceeding $640 million—indicating at least 40% growth. Management is confident that the momentum from AIP will continue driving new customer acquisitions and expansions within existing accounts. Key metrics to monitor include the effectiveness of their bootcamp strategy in accelerating sales cycles and the scalability of their AIP platform in penetrating new markets, both domestically and internationally.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
PLTR Focus
82.14%
10.80%
2.69%
100.53%
PANW
74.10%
13.00%
13.00%
84.23%
ADBE
87.40%
34.50%
8.98%
46.98%
CRWD
75.20%
3.68%
2.33%
327.99%
SQ
35.10%
-2.26%
0.95%
66.79%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Palantir Technologies Inc appears to be well-positioned for sustained growth, particularly within the U.S. commercial landscape driven by its AI offerings. The notable acceleration in revenue, coupled with strong cash flow generation, reduces financial concerns and enhances investment viability. However, investors should remain vigilant about governmental contracting dynamics and competitive pressures within the technology sector. Continuous monitoring of the company's strategic initiatives and customer engagement results will be essential in assessing its trajectory moving forward.
Key Investment Factors
Growth Potential
Palantir’s AIP bootcamp strategy is expected to continue generating significant new customer engagements and expansion opportunities, emphasizing strong organic growth potential as they penetrate the rapidly evolving AI market.
Profitability Risk
Challenges remain, including potential slowdowns in U.S. government revenue growth due to procurement cycles and an evolving technology landscape that requires continuous adaptation to remain competitive.
Financial Position
With $3.7 billion in cash reserves and strong free cash flow generation, Palantir maintains a solid financial footing. The company is poised for further investments in growth initiatives without immediate liquidity concerns.
SWOT Analysis
Strengths
Strong revenue growth driven by AIP and innovative sales approaches.
Robust cash flow and liquidity position, allowing for continued investment in technology and growth.
Established presence with major clients in both commercial and government sectors.
Weaknesses
High reliance on U.S. commercial segments for revenue growth may limit diversification.
Potentially slow revenue recognition from government contracts can impact short-term results.
Opportunities
Expanding AI market provides significant growth opportunities, especially with new customer acquisitions through AIP.
International growth initiatives can enhance revenue diversification as Palantir builds partnerships outside the U.S.
Threats
Intense competition from emerging AI and software companies, particularly those focusing on government contracts.
Regulatory changes and budget constraints within government sectors may impact future contract awards.
Economic downturns or shifts in federal spending priorities could also pose risks to revenue growth.