Palantir Technologies | Q3 2025 Earnings Webcast

Good afternoon. I'm Anasara from Palantir's finance team, and I'd like to welcome you to

our third quarter 2025 earnings call. We'll be discussing the results announced in our press

release issued after the market closed and posted on our Investor Relations website. During the

call, we will make statements regarding our business that may be considered forward -looking within

applicable securities laws, including statements regarding our fourth quarter and fiscal 2025 results, management's

expectations for our future financial and operational performance, and other statements regarding our plans, prospects,

and expectations. These statements are not promises or guarantees and are subject to risks and

uncertainties, which could cause them to differ materially from actual results. Information concerning those risks

is available in our earnings press release distributed after the market closed today and in

our SEC filings. We undertake no obligation to update forward -looking statements except as required

by law. Further, during the course of today's call, we will refer to certain adjusted

financial measures. These non -GAAP financial measures should be considered in addition to, not as

a substitute for or in isolation from, GAAP measures. Additional information about these non -GAAP

measures, including reconciliation of non -GAAP to comparable GAAP measures, is included in our press

release and investor presentation provided today. Our press release, investor presentation, and other earnings materials

are available on our Investor Relations website at investors .palantir .com. Over the course of

the call, we will refer to various growth rates when discussing our business. These rates

reflect year -over -year comparisons unless otherwise stated. Joining me on today's call are Alex

Karp, Chief Executive Officer, Shams Sankar, Chief Technology Officer, Dave Glazer, Chief Financial

Officer, and Ryan Taylor, Chief Revenue Officer and Chief Legal Officer. I'll now turn it

over to Ryan to start the call. We had a monumental third quarter, shattering

expectations yet again. Our overall revenue grew 63 % year -over -year

and 18 % sequentially. We outperformed across the board, driven by strong execution

in the U .S., which accounted for three -fourths of our business in Q3, growing

77 % year -over -year and 20 % sequentially. Our Rule of 40 score

soared to an unprecedented 114, up 46 points year -over -year and a full 20

points since last quarter alone, reinforcing our position as the defining enterprise software company

of our generation. Our U .S. commercial business grew an incredible 121 % year -over

-year and 29 % sequentially, driven both by insatiable demand and the quantified exceptionalism

compelling customers to scale AIP across their operations. Organizations are

embracing an undeniable truth. growing 77 % year -over -year and 20 % sequentially.

Our Rule of 40 score soared to an unprecedented 114, up 46 points year -over

-year and a full 20 points since last quarter alone, reinforcing our position as the

defining enterprise software company of our generation. Our U .S. commercial business grew an incredible

121 % year -over -year and 29 % sequentially, driven both by insatiable demand

and the quantified exceptionalism compelling customers to scale AIP across their operations.

Organizations are embracing an undeniable truth. Real enterprise AI at scale

requires Palantir. We're seeing that AIP, again and again, is the only platform

delivering transformational impact in this market. And critically, AIP is the

only AI platform that has an actual plan for compounding your enterprise's AI leverage,

not just the model maker's leverage over you. Sharing this leverage with our customers is

our highest priority. Our whole company is singularly focused around value creation for our customers,

and I'm proud to share with you all the fruits of our labor. We closed

our highest TCV quarter ever at $2 .8 billion. Underlying this

performance, we closed a staggering 204 deals worth $1 million or more, of which

91 deals were worth $5 million or more, and 53 deals were worth $10 million

or more. In our U .S. commercial business, which now accounts for 34 % of

our overall revenue, we closed $1 .3 billion in TCV, a milestone achievement for the

fastest -growing area of our business, with a more than 6x year -over -year growth

rate on a dollar -weighted duration basis. The trajectory is clear. Customers are

converting to larger enterprise agreements in short timeframes, reflecting both the expanding scope of their

AI ambitions and the immediate impact our software delivers. A leading medical

device manufacturer signed a multi -year expansion just five months after their initial contract, increasing

ACV more than eightfold. Two weeks into their initial contract, the conversation

evolved from a single -use case to pursuing the opportunity of becoming an AI -first

enterprise. Their CEO approached me to embrace a shared vision for an enterprise -wide

AIP deployment to transform their entire organization. This transformation reflects a

broader pattern we're seeing across our customer base. AI is a strategic imperative owned at

the C -suite level, with executive leadership recognizing that enterprise -wide AI adoption is the

defining factor separating the AI haves and the AI have -nots. We're seeing C -suite

-driven AI transformations across our customers. At a leading insurance company, the CEO has

taken personal ownership of their AI transformation, meeting with our team regularly to orchestrate a

company -wide transformation around AIP, reimagining every function, from underwriting to claims

processing, leading to a significant expansion of our work together. Our partnership with

TWG Global, named Vergence .ai, continues to gain momentum. As

TWG's Thomas Toll noted, quote, what was once a competitive advantage is now

a competitive necessity. Companies that fail to incorporate AI into their core operations will

be outpaced by those that do. These examples underscore what we are seeing.

We are the only platform bringing true transformational impact to the enterprise AI

market. Turning to our U .S. government business, revenue grew 52 % year -over -year

and 14 % sequentially as we continue to deliver mission -critical capabilities.

We remain deeply committed to our founding mission of supporting the U .S. government, honored

by the privilege of equipping our nation with transformative software that actually works. We

remain focused on delivering the most advanced defense capabilities in the world to the U

.S. government and internationally to our allied partners around the world. The momentum

we're carrying into Q4 is extraordinary. As we look towards the end of the year,

our mission is clear. Deliver the production capabilities that turn AI from promise into

performance for the enterprises defining the future of their industries through AIP's compounding

AI leverage. I'll now turn it over to Sham. Thanks, Ryan.

20 years of grinding has built a unique moat and a growing lead. Our products

were built... focused on delivering the most advanced defense capabilities in the world to the

U .S. government and internationally to our allied partners around the world. The momentum

we're carrying into Q4 is extraordinary. As we look towards the end of the year,

our mission is clear. Deliver the production capabilities that turn AI from promise into

performance for the enterprises defining the future of their industries through AIP's compounding

AI leverage. I'll now turn it over to Sham. Thanks, Ryan.

20 years of grinding has built a unique moat and a growing lead. Our products

were built for this moment, and the numbers continue to show it. Realizing value from

AI in the enterprise requires the elegant integration of LLMs, workflow, and software.

And this is only possible with ontology. Our foundational investments in ontology

and infrastructure have positioned us to uniquely deliver on AI demand now and in the

world ahead. The most significant product developments are the accelerating progress in our

AI applications inside of AIP. AI FDE, our AIP native

development agent that understands how to connect to data sources, how to integrate and transform

data, how to create ontologies and functions and build applications. It's unleashing incredible speed and

productivity for our FDEs and customer developers alike. At one customer, two

human FDEs spawned an army of AI FDEs to migrate a customer off their legacy

data warehouse in five days, something that would have taken an army of SIs up

to two years. This is not a prototype. This is production. Across our customers, the

results are shocking. AI HiveMind is a new AIP capability that orchestrates a swarm

of dynamically generated agents to tackle hard problem solving, idea generation refinement, and

executable proposal generation that is integrated with ontology and therefore aware of the context of

your enterprise. AI HiveMind was originally developed to solve extremely complex problems in the classified

space, but it's already been used to help our commercial customers identify bottlenecks to their

supply chain, proactively developing possible solutions, and then leveraging AI FD to code that

up into an actual solution. In the government space, AI HiveMind is able to take

its proposals and generate intricate mission plans right in Gaia and Maverick. Our focus with

AIP continues to be enterprise autonomy, our normative view of where the value is for

AI in the enterprise. HiveMind now lets the AI develop novel solutions to emergent

challenges and to identify hidden opportunities. And the rest of AIP enables you to turn

those ideas into an implemented reality. Closed -loop evolution of the business

with AI possible because of AIP and ontology. We continue to make

investments that allow enterprises to extend AIP to the far edge. ontology is a new

lightweight implementation of ontology that runs on mobile devices and enables customers to build mobile

applications or embedded software for hardware, things like drones and robots, and is fully integrated

with your enterprise's AIP instance. Turning to field -facing updates, the U .S. Army

issued an official public memo directing all Army organizations to consolidate and centralize on Vantage,

the Army data platform built on Foundry and AIP. The Army views this not merely

as a technical decision, but a cultural decision, enabling the data -driven decision -making that

continues to make our Army the most lethal in the world. This directive will enable

the Army to rapidly sunset legacy systems and enable more investment in the Army's future

force, concept, and systems. Warp Speed and the American Tech Fellowship are early investments

to support manufacturing and re -industrialization in America are bearing fruit. While Warp Speed launched

by helping new defense entrants meet their surging production goals, it's now being rapidly adopted

across the traditional defense industrial base and the maritime industrial base. The second cohort of

the American Tech Fellowship will be wrapping up in the next few weeks. We started

the American Tech Fellowship because we noticed that many of our best builders were frontline

workers. They don't come from conventional consulting backgrounds. They don't have formal computer science backgrounds.

To highlight a few of these folks, Mason, a Louisiana -based civil engineer, is building

AI applications for more accurate estimates for heavy construction projects, something that is only going

to grow with our re -industrialization. Michael, who works for a potato farm in North

Dakota, is streamlining its operations. And Cody from Georgia, who is a utilities expert, is

building in Foundry to deliver safe, reliable energy across the South. These Americans... American Tech

Fellowship will be wrapping up in the next few weeks. We started the American Tech

Fellowship because we noticed that many of our best builders were frontline workers. They don't

come from conventional consulting backgrounds. They don't have formal computer science backgrounds. To highlight a

few of these folks, Mason, a Louisiana -based civil engineer, is building AI applications for

more accurate estimates for heavy construction projects, something that is only going to grow with

our re -industrialization. Michael, who works for a potato farm in North Dakota, is streamlining

its operations. And Cody from Georgia, who is a utilities expert, is building in Foundry

to deliver safe, reliable energy across the South. These Americans are the true face of

innovation, underscoring that it will be the American worker with AI that drives re -industrialization

and American prosperity. Our customers have taken notice and asked us to create American Tech

Fellowship programs for their employees, specifically to include Lear, who highlighted their fellowship in their

recent earnings call. With that, I'll turn it over to Dave to take us through

the numbers. Thanks, Sean. We had an outstanding third quarter, achieving a rule of 40

score of 114, our highest ever, by 20 points. We also generated our highest ever

reported revenue growth rate of 63 % year -over -year, exceeding the high end of

our prior guidance by 1 ,300 basis points and representing a 3 ,300 basis point

increase compared to the growth rate in Q3 of last year. On the back of

this extraordinary strength, we are guiding to revenue of 1 .329 billion in the fourth

quarter, representing 13 % growth quarter -over -quarter, our highest ever sequential revenue growth

guide, and 61 % growth year -over -year. We're also raising our full year 2025

revenue guidance midpoint to 4 .398 billion, representing a 53 %

year -over -year growth rate, an 8 point or 252 million increase over our full

year 2025 revenue guidance last quarter. In addition, we're raising our full year U .S.

commercial revenue guidance to an excess of 1 .433 billion, representing a growth rate of

at least 104 % year -over -year, a 19 point increase over the guidance we

gave just last quarter. Accelerating demand for AIP continues to drive the outperformance in our

U .S. business overall, which grew 77 % year -over -year and 20 % sequentially

in the third quarter. Our U .S. commercial business grew 121 % year -over -year

and 29 % sequentially, and our U .S. government business grew 52 % year -over

-year and 14 % sequentially. We delivered these exceptional top -line results while also achieving

our highest ever reported adjusted operating margin of 51%, exceeding the high end of our

prior guidance by 500 basis points and highlighting the unit economics of our business at

scale. Our revenue and profitability drove a 20 -point sequential increase to our Rule of

40 score from 94 in the second quarter to 114 in the third quarter. On

a trailing 12 -month basis, we generated $2 billion in adjusted free cash flow for

the first time in the company's history. Turning to our global top -line results, third

quarter revenue grew 63 % year -over -year and 18 % sequentially to $1

.181 billion. Third quarter U .S. revenue grew 77 % year -over -year and 20

% sequentially to $883 million. Excluding the impact of revenue from strategic commercial

contracts, third quarter revenue grew 65 % year -over -year and 18 % sequentially, and

third quarter U .S. revenue grew 78 % year -over -year and 20 % sequentially.

We closed our highest -ever quarter of TCV bookings at $2 .8 billion, up

151 % year -over -year. This eclipses our prior highest quarter of TCV

bookings just last quarter by nearly half a billion dollars. Customer count grew 45 %

year -over -year and 7 % sequentially to 911 customers. Revenue from our largest

customers continues to expand. Third quarter trailing 12 -month revenue from our top 20 customers

increased 38 % year -over -year to $83 million per customer. Now moving to our

commercial segment. Third quarter commercial revenue grew 73 % year -over -year and 22 %

sequentially to $548 million. This is the fourth consecutive quarter that revenue from our

commercial business has been larger than our U .S. government business. Excluding the impact from

strategic commercial contracts, third quarter commercial revenue grew 77 % year -over -year and 22

% sequentially. We closed $1 .4 billion in commercial TCV bookings, representing

132 % growth year -over -year and 32 % sequentially. AIP

continues to drive existing customers. customer. Now moving to our commercial segment. Third quarter

commercial revenue grew 73 % year over year and 22 % sequentially to $548 million.

This is the fourth consecutive quarter that revenue from our commercial business has been larger

than our U .S. government business. Excluding the impact from strategic commercial contracts, third quarter

commercial revenue grew 77 % year over year and 22 % sequentially. We closed $1

.4 billion in commercial TCV bookings, representing 132 % growth year over year

and 32 % sequentially. AIP continues to drive existing customer expansions

and new customer conversions in the U .S. Third quarter U .S. commercial revenue grew

121 % year over year and 29 % sequentially to $397 million.

Excluding revenue from strategic commercial contracts, third quarter U .S. commercial revenue grew 126 %

year over year and 29 % sequentially. In the third quarter, we closed $1 .3

billion of U .S. commercial TCV bookings, representing growth of 342 % year over

year and surpassing the billion -dollar mark for the first time. Over the past 12

months, we closed $3 .8 billion of U .S. commercial TCV bookings, a 217 %

increase from the prior 12 months, highlighting the demand for AI production use cases. Total

remaining deal value in our U .S. commercial business grew 199 % year over year

and 30 % sequentially. Our U .S. commercial customer count grew to 530 customers,

reflecting growth of 65 % year over year and 9 % sequentially. Third quarter international

commercial revenue grew 10 % year over year and 5 % sequentially to $152 million.

For international commercial business, we continue to capitalize on targeted growth opportunities in Asia, the

Middle East, and beyond, but remain focused on accelerating the growth in our U .S.

business. Revenue from strategic commercial contracts was $2 .9 million for the quarter.

We anticipate fourth quarter 2025 revenue from these contracts to be between $2 to $4

million compared to $9 .6 million in the fourth quarter of 2024. We anticipate 2025

revenue from these contracts to be less than half of 1 % of full -year

revenue. Shifting to our government segment. Third quarter government revenue grew 55 % year over

year and 14 % sequentially to $633 million. Third quarter U .S. government revenue

grew 52 % year over year and 14 % sequentially to $486 million. This growth

was driven by continued execution in existing programs and new awards, reflecting the growing demand

for AI in our government software offerings. Third quarter international government revenue grew 66 %

year over year and 16 % sequentially to $147 million, bolstered primarily by our continued

work in the U .K. As previously mentioned, we closed our highest ever quarter of

TCV bookings at $2 .8 billion, up 151 % year over year. Net dollar retention

was 134%, an increase of 600 basis points from last quarter. The increase was driven

both by expansions at existing customers and new customers acquired in Q3 of last year,

as we see the effect of the AI revolution. As net dollar retention does not

include revenue from new customers that were acquired in the past 12 months, it does

not yet fully capture the acceleration and velocity in our U .S. business over the

past year. We ended the third quarter with $8 .6 billion in total remaining deal

value, an increase of 91 % year over year and 21 % sequentially, and $2

.6 billion in remaining performance obligations, an increase of 66 % year over year and

8 % sequentially. As a reminder, RPO is primarily comprised of our commercial business,

as it does not take into account contracts with an initial term of less than

12 months and contractual obligations that fall beyond termination for convenience clauses, both of which

are common in most of our government business. Turning to margin and expense. Adjusted gross

margin, which excludes stock -based compensation expense, was 84 % for the quarter. Adjusted income

from operations, which excludes stock -based compensation expense and related employer payroll taxes, was

$601 million, representing adjusted operating margin of 51%. Q3 adjusted expense

was $581 million, up 8 % sequentially and 29 % year over year, primarily driven

by our continued investment in AIP and technical hiring. We continue to expect expenses to

increase in the fourth quarter as we remain committed to investing in the product pipeline

and the most elite technical talent, all while delivering on our goals of sustained GAAP

profitability. Third quarter GAAP operating income was $393 million, representing a

33 % margin. Third quarter GAAP net income was $470 million. employer payroll taxes

was $601 million, representing adjusted operating margin of 51%. Q3 adjusted

expense was $581 million, up 8 % sequentially, and 29 % year -over -year,

primarily driven by our continued investment in AIP and technical hiring. We continue to expect

expenses to increase in the fourth quarter as we remain committed to investing in the

product pipeline and the most elite technical talent, all while delivering on our goals of

sustained GAAP profitability. Third quarter GAAP operating income was $393 million,

representing a 33 % margin. Third quarter GAAP net income was $476 million,

representing a 40 % margin. Third quarter stock -based compensation expense was $172 million,

and equity -related employer payroll tax expense was $35 million. Third quarter GAAP earnings

per share was $0 .18. Third quarter adjusted earnings per share was $0 .21.

Additionally, our combined revenue growth and adjusted operating margin accelerated to 114 % in the

third quarter, a 20 -point increase to our Rule of 40 score from the prior

quarter, and our ninth consecutive quarter of an expanding Rule of 40 score. With the

increase in our 2025 revenue and adjusted operating income guidance, we are now guiding to

a Rule of 40 score of 102 % for the full year. Turning to our

cash flow. In the third quarter, we generated $508 million in cash from operations and

$540 million in adjusted free cash flow, representing margins of 43 % and 46 %

respectively. Additionally, we achieved $2 billion in trailing 12 -month adjusted free cash flow for

the first time. Through the end of the third quarter, we repurchased approximately 2 .6

million shares as part of our share repurchase program. As of the end of the

quarter, we have $880 million remaining of the original authorization. We ended the quarter with

$6 .4 billion in cash, cash equivalents, and short -term U .S. Treasury securities. Now

turning to our outlook. For Q4 2025, we expect revenue of between $1

.327 and $1 .331 billion, and adjusted income from operations

of between $695 and $699 million. For a full year 2025,

we are raising our revenue guidance to between $4 .396 and $4

.400 billion. We are raising our U .S. commercial revenue guidance to an excess of

$1 .433 billion, representing a growth rate of at least 104%. We are

raising our adjusted income from operations guidance to between $2 .151 and $2

.155 billion. We are raising our adjusted free cash flow guidance to between $1 .9

and $2 .1 billion. And we continue to expect gap operating income and net income

in each quarter of this year. With that, I'll turn it over to Alex for

a few remarks, and then Ana will kick off the Q &A. Greetings.

By any normal or even reasonable standard, these are not normal

results. These are not even strong results. These aren't extraordinary results. These are arguably

the best results that any software company has ever delivered. And

that's not hyperbolic. Despite what your analyst friends may want you to believe, because

they've been wrong at every price, they're wrong at every single round. But of course,

they're persuasive, and they're not investing their own money. But a

normal enterprise company should not have a rule of 40 above 100. A normal enterprise

company at our base should not have over 100 % U .S. commercial growth, should

not have 77 % growth in the U .S. And by the way, that

growth is being held down by a stagnant Europe, which is still a significant

part of our business. So the pure unvarnished numbers are

77 % growth off of a massive significant base with very significant cash flow

with a company that throws off a rule of 40 of 114. And then if

this world was at all sane, every single person in the financial world would stop

and say, how did this happen? How did a company stand stood by the

American warfighter, marine special operators, people in clandestine

services who stood up for our right of free speech and was really the first

company to be completely anti -woke? How did this company

stick up for the American warfighter actually give normal Americans How did this company stand?

How did this company stand? How did this company stand? How did this company stand?

a rule of 40 of 114. And then if this world was at all sane,

every single person in the financial world would stop and say, how did this happen?

How did a company which stood by the American warfighter,

Marines, special operators, people in clandestine services, who stood up for

our right of free speech and was really the first company to be completely anti

-woke? How did this company stick up for the American warfighter,

actually give normal Americans venture quality results? So

one of the issues we have with the Arbiters of Truth is it was the

American worker that we supported and the American worker that we helped make rich. And

the Arbiters of Truth somehow did not participate in that because they were such experts.

And of course, you know, but what these numbers show is doing that and

taking the American worker along with it and doing it in a way that

foreshadowed the future. FDE, ontology, foundry, making each specific

institution, making the American warfighter fight the way the American warfighter is born to fight,

empowering the tenets of being, you know,

free and having the ability to do creative things in the battlefield context.

And then taking enterprises, instead of selling them commodity

parasitic software with a massive sales force, with a kind of lumbering,

jargon -bearing leaders offering you steaks and dinners and other

things we shall not mention, in order that you turn the value, the high value

revenue of your enterprise over to them in return for these

accolades, we created direct alignment with our customers. And what does that mean? It means

when our customers have a unique and tribal way of doing something, whether it's underwriting

or fighting or making workers even more valuable, we put an FDE,

we orchestrated an ontology, we take the tribal understanding of their business, the specific nature

of their business that makes them particular and valuable and lethal, and we

empower that. And how do we participate in that? Unlike seemingly, in the most

obvious way, we are downstream from the value of creation. So when you see 141

or you see 77 percent or 63 and you ask, and by the way, with

really a workforce that is not growing in any way linearly proportional to

that growth, and also with a sales force, which is declining, which seems improbable, the

reason why that's working is because we are making our clients more money or we're

making them more dominant on the battlefield, and they're paying us a subset of that.

And this is why these numbers are so extraordinary. The sociological

and political version of this should be, wait a minute, how can we learn from

this? How can we implement institutions? By the way, we have all these people talking

about an AI bottle. I'll tell you what 114 proves. There is a massive part

of the AI market that actually cares about value creation, and that's the part we

own. And we own that part because to do this, you have to have FD

orchestration, you have to have ontology, and you have to have foundry, and you have

to have access to the game. And you have to have deep understanding of how

to do that. And you have to have done this for a very, very long

time with products. By the way, and then the products are getting better and better

and better and better. And I'll let Shum talk about what we're doing on the

battlefield to the extent that he can, but you see the very similar trajectory where

we're giving America, both in industry and in government, a massive unfair advantage. And

again, you see it, like, if you look at our numbers, look at how poorly

Europe is doing. Look how well America's doing. Look how we're doing this. And again,

it's not just top line. The rule of 114 that we have shows top line

and bottom line growth that is distinctive, massive, and unique. And on top of everything

else, you know, there is this issue in the US that we're all focused on

at Palantir, which is what access, what portion of the GDP growth that we're blessed

to have in this country, meaning GDP growth defined or helped out

and bolstered by AI, what percentage of that is available to the American worker?

And so when we're, we're, you know, AI, GDP availability for the American worker. Okay.

The 114 that we have shows top -line and bottom -line growth that is distinctive,

massive, and unique. And on top of everything else, you know, there is

this issue in the U .S. that we're all focused on at Palantir, which is

what access – what portion of the GDP growth that we're blessed to have in

this country, meaning GDP growth defined or helped out and bolstered

by AI, what percentage of that is available to the American worker. And so when

we're – you know, AI – GDP availability for the American worker, meaning do they

participate in this growth, or is it just people around this table who are getting

richer and richer? And then you see our platform on the battlefield, as Sean was

mentioning. The people doing the coding in AIP are vocationally trained,

smart Americans with specific knowledge. They don't have – and actually – and

people on the factory floor, very same thing. People across the nation, truck drivers,

anybody with specific domain expertise is more powerful, more valuable in our

product than they were yesterday. In fact, the real misalignment of AI is with people

with commodity -like, high -trained, elite institution, general specialists. Capitalists, that's just

not as valuable as it was. And yes, the destructive – positive destruction

of capitalism is going to put that class of people, typically the class of people

that also is kind of skeptical of Palantir, under enormous pressure. But it is our

– what I see in these numbers and what I think we see in these

numbers is – you know, to be – put it slightly over the top, yeah,

we were right, you were wrong. And we are going to go very, very deep

on our rightness because it is exceedingly good for America. It's exceedingly good for the

American economy. It's as good for American workers. And you know what? I really enjoy

turning on TV and seeing some analysts explain why some other company is better than

ours simply because they didn't make any money on our company and probably aren't. And

we're just going to keep going and going and going. And then we're obviously not

going to forecast for next year. But I would say if you're thinking about how

this company is going to go, look at our ability to value create. Look at

our ability to create revenue on the top end. Look at it – look at

the unit economics of our business. If you're a technical expert in how do you

evaluate business, evaluate those numbers against any other business you've ever seen and then make

your decision. But, yeah, I'm wildly enthusiastic. I think we're wildly enthusiastic. And

thank you for those of you who stayed with us to enjoy these numbers, especially

Palantirians who work day and night to deliver these kind of numbers.

Thank you, Alex. We'll now turn to questions from our shareholders before opening up the

call. We received a few questions asking, what do you see as Palantir's unique differentiator

that others may not understand? Well, Alex mentioned a bit of this here. You know,

it's become fashionable, actually, for lots of companies to start hiring FDEs. The Financial Times

had an article about how it's the most popular new job title. But what you

see is that they don't really understand it. It's just mimetic. And if you –

everything, Alex, you said, like we build software that works, not software that ought to

work. We built software for the world as it exists, not a world that never

was. And this ability to find what's true, that comes from the FDE. Our measure

of success is not did we sell the software, it's did we solve the problem.

And we have built an entire software stack over two decades downstream of creating value

for our customers. That led to the ontology a decade ago, more than a decade

ago, which is a fundamental prerequisite to getting value out of LLMs and the enterprise.

And this past year, it led to AI Hivebind and AI FDE. The other thing,

which, like, is implicit in that is the way we work puts us up –

forces us to go up the chain of complexity every day. So we're taking on

the most painful, most integral, most valuable parts of the stack in every enterprise. And

it's precisely because, like, that's the way we actually lever our ability to deploy and

orchestrate FDEs. That's the way we make our product stronger. And quite frankly, that's the

way we produce these numbers because the closer you are to the front line of

the very complex problem that a black box was not meant to solve, cannot solve,

and at this point everyone knows a joke to believe it could solve, that's where

you – and, by the way, it's the safest position for us because this company,

we will always believe that we are outsiders. We need to be in the place

where the most valuable problem is being solved. And it's precisely because, like, that's the

way we actually lever our ability to deploy and orchestrate FDEs. That's the way we

make our product stronger. And quite frankly, that's the way we produce these numbers, because

the closer you are to the front line of the very complex problem that a

black box was not meant to solve, cannot solve, and at this point everyone knows

a joke to believe it could solve, that's where you – and by the way,

it's the safest position for us. Because this company, we will always believe that we

are outsiders. We need to be in the place where the most valuable problem is

being solved, because that's the way we end up staying, solving the problem tomorrow, and

the way we get paid. Thank you both. Our next question is from Dan with

Wedbush. Dan, please turn on your camera, and then you'll receive a prompt to unmute

your line. One.

And then with that, I'll see you.

Mr. Dan Ives, we don't see you. Oh, there you are. Yeah, great.

Look, obviously, another monster quarter for you guys. Congrats. So, my

question for you is, you know, for Alex and the team, what – can

you just walk through just the accelerated sales cycles that you're seeing from so many

companies that have gone to the boot camps? Like, what surprised you from –

when they come to you at that first sort of, you know, contact to now

actually launching deals? I mean, you know, maybe you could talk about that just in

terms of everything you're seeing anecdotally. Great. Thanks, Dan. So, I think, you know, we

look at U .S. commercial. We closed $1 .3 billion in TCV at 6x on

a dollar -weighted duration basis from what it was a year ago. And of those

deals, 83 were worth a million or more. 40 were $5 million or more. 21

deals were $10 million or more. I've been involved in a lot of those directly.

I'm feeling exactly what you're asking on the ground from customers. And what's happening now

is from the C -suite across the company, customers are coming to us looking to

not just say, let's do a use case. The customers we're having the most impact

are coming to us saying, how do we deploy this across our entire organization? How

do we reorganize our entire organization around Palantir and AIP? And that's what's happening on

the ground. And we're singularly focused on delivering the value to the customers, and that's

our go -to -market. How do we get the product to them and deliver the

value? Where Ryan is, like, really very much on the front line here is, you

know, there's both how many customers approach you. I think where we're seeing the biggest

shift is the customers who've approached us very quickly want to move to,

how would I change my enterprise to express it in a way that's most valuable,

according to my terms, in your product? And then, and literally want to reorg,

a shorthand version that we often use is, you used to have to take your

company private to change the unit economics of it. Basically, just like we're

providing venture results, high -end venture results to normal investors in the last couple years,

what we're doing actually in enterprises is providing a private equity -like transformation in the

public markets, in the public space, under the current leadership. And that's essentially

what our best – and, by the way, the other thing Ryan would tell you

about is our newer clients have much higher expectations of us. Like, they're like, essentially,

I want to transform my business. I want to do it in months. I want

to do it in the public eye while being in the public market, mostly, not

exclusively. And I want you to not only do the product side but also tell

us how would you actually implement AI, foundry, ontology, FTE model, and our tribal

knowledge to do that. And, you know, it's a completely different game. We used to

have to beg and plead to be – like, you know, when we first started

talking, we were begging and pleading to be at the margin of a problem that

could affect a subset of the business. By the way, Cham, you know, it's like

unfortunately he can only tell you 1 percent of what he's involved in. But this

is like exactly the same in the U .S. government around the world. It's like

the things that we're sitting on and working on are like crazy, crazy important, and

they're not downstream of the problem. They are the problem, and we're reshaping them.

Thank you both. Our next question is from Mariana with Bank of America. Mariana, please

turn on your camera, and then you'll receive a prompt to unmute your line. Afternoon,

everyone. Hello. I'm going to do as usual. By the way, Chom, you know, it's

like, unfortunately, he can only tell you 1 % of what he's involved in. But

this is like exactly the same in the U .S. government around the world. It's

like the things that we're sitting on and working on are like crazy, crazy important.

And they're not downstream of the problem. They are the problem. And we're reshaping them.

Thank you both. Our next question is from Mariana with Bank of America. Mariana, please

turn on your camera, and then you'll receive a prompt to unmute your line. Afternoon,

everyone. Hello. I'm going to do, as usual, a couple of questions, one on commercial,

one on defense or government. On commercial, I'd like to follow up to Dan's

question. And let's see if you can discuss what changed from a behavioral perspective,

from a customer's perspective, to see this accelerated appetite to incorporate volunteer

to not only accelerating how many customers you have, but also the existing

customers go to go up the value chain. And what changed internally as well? We

recently saw in a visit these like AI agents or AI FDs, like how are

you incorporating tech internally to be able to accelerate and catch up with that demand?

And on the government side, U .S. government up 50 % plus. It's really

impressive. And how do you think about opportunities like Golden Dome going forward

piling up to this? Well, you guys want to answer these questions? I think

that there's the external one, which is like what does it feel like? That's clearly

you. The internal one is a really subtle question. And I don't know, anyone should

jump in there. And then obviously you should have Sean opine on, yeah.

Well, do you want to start with commercial or? Sure, yeah. I think on the

external, I think it's like going deeper and deeper and more and more like tangible

results with customers where there's a network effect incoming, like customer sharing impact

that we're having and direct impact we're having with customers. are seeing as we, you

know, it's a continuation of what we've been doing, but going deeper and deeper with

the customers on that impact. And I think that, you know, what we're seeing is

more and more are now coming to us saying, and the ones that are most

impactful are coming to us saying, let's do more. You know, Ryan is our best

at being a wonderful, I'll just give a vulgar version here. You know, our clients

realize the choices suck, basically. And they've tried a lot of stuff. It hasn't worked.

And then we're in so many verticals. We, you know, we're, say, let's just say

we're in vertical 252 and we dominate for one customer. People see that. And then

they're like, oh, well, I'll try this with some, I don't know, knockoff, have fake

thing. You know, it's just like, you know, and then a lot of people really

still don't understand that are still trying to do this long migration where, you know,

LLMs are going to perform as if they're LLMs and ontology and as if the

LLMs were not a commodity. And then, but then in the marketplace, they see the

final result of someone else using ontology, foundry, FDE. And now it's like, wait a

minute, you know, I'm paying hundreds of millions of dollars and getting nothing. And the

person down the road I kind of look down on is way ahead of me

and their unit economics are transforming overnight. And that just shifts the whole conversation

because then we're like, okay, well, if you want it to work, you're going to

have to do these five things. And these things are like you're going to have

to talk to Ryan and you're going to have to, I don't know, occasionally meet

with me. And you're going to have to actually allow us to come in with

engineers. And we're going to have to actually work on the problems that are valuable

for your business and also look at the costs that are dragging you down. By

the way, the cost for most businesses is not just the actual money they're wasting.

That wasted money creates an ecosystem of waste. They're talking to all these vendors all

the time about all these things will never work instead of solving the problem. It's

like, and so getting the pathogens out of their business is a real issue. And

now they're really, really interested in this. And so – and then on the internal

front, I would say, you know, it's just we have to

double down – the most important thing for us internally is with all this success,

we do not want to give up the unique attributes of Palantir and

somehow purchase fake ways for us that are artificial for us. And so

making sure we are very, very close to the problem and making sure everyone here

– like if you heard our internal dialogue, it's much more like who's on the

factory floor here? What are we doing internally? And then on the internal front, I

would say, you know, it's just we have to double down.

The most important thing for us internally is with all this success, we do not

want to give up the unique attributes of Palantir and somehow purchase

fake ways for us that are artificial for us. And so making sure we

are very, very close to the problem and making sure everyone here, like if you

heard our internal dialogue, it's much more like who's on the factory floor here? What

are we doing internally? How do we make sure our products are better and better?

How do we make sure, say, Sham, you know, is a savant at going around

and figuring out what the underlying tech issue is. How do we make sure we

have the best product team and the very, very exact right fit for every single

deployment across our deployments that we care about, especially mission deployments, which we highly,

highly overvalue in terms of our time and energy. And, like, how do you make

sure Palantir stays as tribal and cultist and unique as it was 20 years ago?

How do we double and triple down on that? And how do we recruit the

right people? And then internally we have, look, we power ICE, we power efforts to

defend American, Ukraine, and with allies. We're on the front line of all adversaries, including

vis -a -vis China. And we support – we're at ICE, and

we've supported Israel. Okay, these are very controversial. I don't know why this is all

controversial, but many people find that controversial. Okay, so how do you align people to

focus on these things in a way that is actually beneficial for us and our

clients? These are really hard and tricky issues that we spend a lot of time.

I would say as an overarching thing, because what we found is the more we

focus on our internal dynamics, the better our numbers are. That's why we have less

salespeople, and we have 77 percent growth in 75 percent of our market,

121 percent growth in U .S. Com. Please tell that to some of your friends.

I don't even understand how they can look at these numbers and not drop the

key out of their Motel 6 and just, like, say – you know what I

mean? They're, like, they're bombastic numbers. But it's, like, internal focus.

I'll make the mistake of trying to follow Alex there and just say, on the

internal side with AIFDE, that's why we actually originally built it. You know, our headcount

has grown roughly 10 percent, but revenue grew 63 percent. How are we doing that?

You know, we've made our FDEs wildly more productive, and, I mean, so much so

that we decided to give it to our customers, and we've started to make our

customers more productive. When you have a note like the Army Vantage note where the

Army is consolidating into the Army data platform, you now have an army, literal army

of green suitors who need to become proficient developers in the software. And you have

a generation of green suitors whose first interaction with the software is going to be

with AIFDE. They're going to be superheroes on day one. I think it's accelerating adoption.

It's accelerating understanding, like, the depth of adoption. Not just are you using it, but

how much of it are you really using? How much of it can you understand?

And then quickly on your comment on the U .S. government business, like, yeah, the

number of opportunities out there are great. I can't comment on all the opportunities you

mentioned there, but whether it's NGC2, the continued growth of MAVEN. I mean, we have,

of course, America's involved with three conflicts right now in the world, from Europe, the

Middle East, and in our own hemisphere right now. And things are getting a little

spicy in Africa. By the way, let me say something slightly political, and I'm not

saying other people agree with this. But when people are attacking our soldiers for

stopping fentanyl from coming to this country, I want people to remember, if fentanyl was

killing 60 ,000 Yale grads instead of 60 ,000 working -class people, we'd be dropping

a nuclear bomb on whoever was sending it from South America. So, you know, it's

slightly like we in this – at Palantir, we are on the side of the

American, average American, who sometimes gets screwed because all the empathy goes to elite

people, and none of it goes to the people who are actually dying on our

streets. And that's why, you know, it's like when you have an open border, it

means that the average poor American earns less. I know my fellow progressives believe having

an open border is going to make things, but that's because they're actually repping elite

people instead of the working class. And the same thing in South America, where it's

like, you know, to believe our Constitution does not give us the right to stop

60 ,000 deaths a year of working -class men and women is insane. And this

country is right to stop that, and I am very proud. I don't know all

the efforts we're involved in. goes to elite people, and none of it goes to

the people who are actually dying on our streets. And that's why, you know, it's

like when you have an open border, it means that the average poor American earns

less. I know my fellow progressives believe having an open border is going to make

things, but that's because they're actually repping elite people instead of the working class. And

the same thing in South America, where it's like, you know, to believe our Constitution

does not give us the right to stop 60 ,000 deaths a year of working

class men and women is insane. And this country is right to

stop that, and I am very proud. I don't know all the efforts we're involved

in, but to the extent we're involved in these efforts, I and most Palantirians are

very proud of this. You're here. Thank you. Alex, as

always, we have a lot of individual investors on the line. Is there anything you'd

like to say before we end the call? We're rocking along.

Please turn on the conventional television and see how unhappy those that

didn't invest in us are. Get some popcorn. They're crying.

We are every day making this company better, and we're doing it for

this nation, for allied countries, and also for – and I know I

really like the term retail investors. How about sane people who put up their own

money and fight for us? And by the way, you know, you are fighting for

the right side of what should work in this country, meritocracy, lethal technology vis -a

-vis adversaries, products that spread GDP to working class men and women

by making their value creation higher, and, by the way, your bank account, and thank

you for that. Thank you. That concludes Q &A for today's call.