Palantir’s strong quarter masks signs of slowing enterprise sales

Palantir reported third-quarter revenue of $2.31 billion, up 96% from a year earlier and 20% from the previous quarter. It was the company’s first quarter above $2 billion, and the result exceeded analysts’ $2.18 billion expectation. Adjusted earnings reached $0.44 per share, compared with an expected $0.41, while Palantir also raised its full-year revenue guidance.

U.S. commercial revenue exceeded U.S. government revenue for the first time. Commercial contracts generated $984 million, a 148% year-over-year increase, versus $953 million from the U.S. government. Palantir attributed enterprise demand to software that lets customers use and customize AI models securely without sharing data or business processes with external AI labs.

The company also reported a potential warning sign. CEO Alex Karp said enterprise customers were moving from initial engagement to deployment faster, but were signing shorter contracts that could later expand. Total contract value from U.S. enterprises was $1.46 billion, down from $2.13 billion in the previous quarter. Palantir raised its U.S. commercial revenue outlook to more than $3.559 billion, implying growth of at least 143%.