EPS of $0.06 increased by 355.3% from previous year
Gross margin of 81.0%
Net income of 134.13M
""We have the right products at the right time and our history means that we understand the $600 billion opportunity unlike anyone else in this space."" - Ryan Taylor
In Q2 2024, Palantir Technologies (PLTR) reported substantial growth in revenue and profitability, propelled by robust demand in both its commercial and government sectors. The company's revenue surged to $678 million, reflecting a 27% year-over-year increase and a 7% sequential rise. Net income reached a record $134 million, showcasing a remarkable 377% growth compared to the previous year. Management attributed the success largely to the strong execution of its AIP (Artificial Intelligence Platform), which facilitated the transition from prototype development to production across various industries. Palantir's commitment to leveraging its unique capabilities in this booming AI landscape positions it favorably for sustained growth going forward.
Key Performance Indicators
Revenue
678.13M
QoQ: 6.90% | YoY:27.15%
Gross Profit
549.57M
81.04% margin
QoQ: 6.08% | YoY:28.88%
Operating Income
105.34M
QoQ: 30.24% | YoY:945.65%
Net Income
134.13M
QoQ: 27.10% | YoY:376.86%
EPS
0.06
QoQ: 26.00% | YoY:355.30%
Revenue Trend
Margin Analysis
Key Insights
Total Revenue: $678 million (Up 27% YoY, 7% QoQ)
US Commercial Revenue: Grew 70% YoY, illustrating strong demand for enterprise applications.
Government Revenue: Increased by 24% YoY, with significant orders from the DoD.
Net Income: $134 million (Net Income Margin: 20%)
Adjusted Operating Margin: 37%
Financial Highlights
Revenue Performance:
- Total Revenue: $678 million (Up 27% YoY, 7% QoQ)
- US Commercial Revenue: Grew 70% YoY, illustrating strong demand for enterprise applications.
- Government Revenue: Increased by 24% YoY, with significant orders from the DoD.
Profitability:
- Net Income: $134 million (Net Income Margin: 20%)
- Adjusted Operating Margin: 37%
- EPS: $0.06,
Balance Sheet Health:
- Total Cash and Investments: $4 billion
- Total Assets: $5.19 billion
- Total Liabilities: $1.05 billion
Cash Flow:
- Cash Flow from Operations: $144 million, indicating strong operational health.
- Free Cash Flow: $141 million, with a 21% margin.
Management Commentary:
Management expressed optimism about accelerating growth and highlighted how AIP is critical in solving the transition challenges faced by enterprises attempting to implement AI. They reported signing 27 high-value deals worth over $10 million each in the quarter, translating to nearly $1 billion in Total Contract Value (TCV).
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
678.13M
27.15%
6.90%
Gross Profit
549.57M
28.88%
6.08%
Operating Income
105.34M
945.65%
30.24%
Net Income
134.13M
376.86%
27.10%
EPS
0.06
355.30%
26.00%
Key Financial Ratios
currentRatio
5.92
grossProfitMargin
81%
operatingProfitMargin
15.5%
netProfitMargin
19.8%
returnOnAssets
2.58%
returnOnEquity
3.31%
debtEquityRatio
0.06
operatingCashFlowPerShare
$0.06
freeCashFlowPerShare
$0.06
priceToBookRatio
14.26
priceEarningsRatio
107.65
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Revenue Growth:
- Ryan Taylor, Chief Revenue Officer, stated, "Overall revenue growth, excluding strategic commercial contracts, accelerated to 30% year-over-year and 10% sequential in Q2."
Customer Acquisition:
- The US commercial customer count grew 83% year-over-year, indicating a strong market presence and customer interest.
AIP Expansion:
- Taylor noted, "A major North American industrial company... expanded to a $20 million run rate this year."
Government Contracts:
- Notable contracts included an initial order worth $153 million from the Department of Defense, with potential follow-on awards totaling $480 million.
"We have the right products at the right time and our history means that we understand the $600 billion opportunity unlike anyone else in this space."
â Ryan Taylor
"Our focus is on deploying enterprise AI in production, solving meaningful problems for our customers."
â Ryan Taylor
Forward Guidance
For Q3 2024, Palantir anticipates revenue between $697 million and $701 million, indicating continuous growth momentum. Additionally, the full-year revenue forecast has been raised to between $2.742 billion and $2.750 billion, showcasing management's confidence in capturing further market opportunities. Investors should monitor the potential for increased collaboration with government entities and heightened demand for the AIP as key indicators of future performance.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
PLTR Focus
81.04%
15.50%
3.31%
107.65%
PANW
74.70%
11.70%
40.10%
15.48%
ADBE
87.90%
35.50%
10.60%
31.74%
CRWD
75.40%
1.42%
1.65%
301.08%
SQ
35.60%
8.65%
1.01%
50.48%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Palantir is positioned uniquely at the intersection of technology solutions and governmental needs, particularly as AI becomes a cornerstone of operational efficiency. Investors should view the increased revenue guidance and the availability of capital as indicators of confidence in both current operations and future expansion efforts. Continued growth in the commercial sector and upcoming government contracts should further solidify its financial health and market position.
Key Investment Factors
Growth Potential
Palantir's substantial revenue growth (70% YoY in commercial) underscores its potential to capitalize on the expanding AI market, particularly in production transitions which are creating demand for its enterprise solutions.
Profitability Risk
A reliance on a few large contracts presents risks, especially if government funding dynamics shift. Additionally, the competitive landscape in AI infrastructure remains intense and evolving.
Financial Position
Palantir's robust balance sheet, with over $4 billion in cash and short-term investments coupled with strong cash flow generation, positions the company well for future investments.
SWOT Analysis
Strengths
Strong revenue growth driven by commercial and government sectors
Robust profitability with strong margins
Innovative AIP platform positioning it ahead of competitors
Weaknesses
High dependency on government contracts for revenue
Perception challenges due to complex product offerings
Opportunities
Expanding AI-driven applications in various industries
Increasing government defense spending presenting contract opportunities
Growing customer interest in AI transition from prototypes to production
Threats
Intense competition in AI software and enterprise solutions
Regulatory risks associated with government contracts
Economic downturns could impact budget priorities for customers