Palantir Technologies Inc. (NASDAQ:PLTR) just dropped its second-quarter numbers, and they're not messing around. The AI software company reported revenue of $1.94 billion, blowing past the $1.80 billion analysts were looking for. Adjusted earnings came in at 41 cents per share, also beating the 35-cent consensus. The market liked what it saw: shares were up 7.71% in after-hours trading, sitting at $135.32.
But the headline numbers only tell part of the story. Total revenue grew 93% year-over-year, with U.S. revenue up 115% to $1.57 billion. The real star was U.S. Commercial, which jumped 149% to $764 million. U.S. Government revenue wasn't too shabby either, up 90% to $809 million. And if you're into metrics like the Rule of 40, Palantir's score is now a jaw-dropping 155%.
CEO Alex Karp, never one for understatement, called the quarter "otherworldly." In the earnings release, he said, "Demand for AI sovereignty has now been unleashed. And Palantir is the only company that has demonstrated it can transform tokens into actual economic value." He added, "This quarter was otherworldly: our U.S. commercial revenue grew 149% year-over-year, our overall revenue grew 93% year-over-year, and our Rule of 40 score climbed to 155%. The sovereign AI revolution makes us very optimistic about the future."
It's not just about the big numbers. Palantir closed 220 deals worth over $1 million during the quarter, 98 deals worth at least $5 million, and 73 deals worth at least $10 million. That's a lot of big-ticket customers signing on.
Cash flow is looking healthy too. The company generated $1.22 billion in cash from operations and $1.22 billion in adjusted free cash flow. It ended the quarter with about $9.2 billion in cash, cash equivalents, and short-term U.S. Treasury securities. That's a nice cushion.
Looking ahead, Palantir expects third-quarter revenue between $2.16 billion and $2.164 billion, well above the $1.997 billion analysts had penciled in. For the full year, the company raised its revenue guidance from $7.65-$7.66 billion to $8.15-$8.16 billion, versus the $7.69 billion consensus. It also upped its U.S. Commercial revenue growth forecast to at least 134%, up from at least 120%, and raised adjusted free cash flow guidance to $4.5-$4.7 billion from $4.2-$4.4 billion.
Karp also shared some thoughts in his letter to shareholders, touching on the broader AI landscape: "Every organization in the world is awakening to the risks of handing the creators of the language models the keys to their institutions, of letting the models loose within their homes. The demand from our partners is clear."
The management team will discuss the quarter in more detail on an earnings call scheduled for 5 p.m. ET. If the after-hours move is any indication, investors are eager to hear what they have to say.
