One of Wall Street’s most divisive companies, Palantir saw its stock price soar yesterday following yet another earnings and revenue beat.
Aug. 13, 2021
Palantir (NYSE: PLTR) has long been a company that divides opinion, whether it be on a purely financial basis or for reasons of morality.
However, with revenue jumping 49% year-over-year for the second consecutive quarter, is the financial question finally being answered?
Is Palantir profitable yet?
No, we’re not at profitability yet, though its adjusted earnings per share quadrupled to $0.04, matching consensus estimates. This was helped along by the aforementioned revenue growth to $376 million for the quarter, which drove management to raise its expected full-year adjusted free cash flow to in excess of $300 million, up from in excess of $150 million.
But the real excitement lies in its growing ability to pick up contracts and expand its customer base.
Often criticized for its overreliance on government contracts, last month Palantir launched a subscription-based version of its data gathering and analytics technology, called Foundry for Builders, that’s targeted for start-ups. This helped its U.S. commercial revenue to grow 90% YoY in Q2, with its commercial customer count also receiving a 32% boost.
Overall, the company reportedly added 20 net new customers in the second quarter, whilst also signing 30 deals worth $5 million or more and 21 deals worth $10 million or more.
Alongside its already strong government contract business, Palantir really does appear to be ramping up its commercial business. This takes care of a number of the company’s biggest bear arguments; being its lack of revenue diversification, and the other being its willingness to collude with so-called ‘shady’ government organizations.
Palantir is expected to be profitable within the next 3-5 years, but with a continued uptake in data gathering post-pandemic, this estimate may be brought forward. No doubt this was a strong quarter, so potential investors should keep an eye on its 2021 performance for any updates.
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