Palantir Technologies Inc. just notched its fourth quarterly GAAP profit in a row, and executives at the software company are cheering its traction in artificial intelligence.
Shares of Palantir
PLTR,
were up more than 20% in Thursday morning action.
The company early Thursday posted net income of $72 million, or 3 cents a share, whereas Palantir recorded a net loss of $124 million, or 6 cents a share, in the year-earlier period.
With Palantir’s streak of GAAP profits, it’s now eligible for inclusion in the S&P 500, though it’s up to the index committee which companies get to join.
On an adjusted basis, Palantir reported 7 cents in earnings per share, ahead of the FactSet consensus, which was for 6 cents.
Revenue rose 17% to $558 million in the third quarter, edging consensus expectations for $556 million. Palantir enjoyed upside in its U.S. commercial business, which posted 33% top-line growth and benefited from demand for the company’s Artificial Intelligence Platform, known as AIP.
Also see: Should investors ’embrace the suck’ of software stocks? Here’s what history has to say.
“This whole quarter was driven by the strength of the U.S. commercial business,” Chief Financial Officer David Glazer told MarketWatch, adding that AIP is “really on fire.”
Ryan Taylor, the company’s chief revenue officer, said Palantir has revamped its go-to-market strategy to focus on so-called boot camps that help customers get acquainted with the product more quickly. “We deliver the product to customers and deliver real workflow at the end of that,” he said, something that’s had “a huge impact on unit economics.”
Palantir almost tripled the number of customers using AIP last quarter, marking “the tip of the iceberg in terms of what we’re doing with AI,” according to Taylor.
Chief Executive Alex Karp described Palantir’s latest results as “baller,” but said that while a “normal CEO” would be ecstatic about the numbers, he was proud of more than just the financials. Karp is “most proud” that Palantir is “at the forefront of fighting terrorism.”
Read: Palantir’s CEO has this message for skeptics and believers alike
There’s now “a pretty big understanding” that “the battlefields of the future will be software-driven,” a dynamic he finds “gratifying.”
Revenue for Palantir’s government business increased 12% in the third quarter to $308 million.
Palantir shares are up 132% so far this year, causing some on Wall Street to wonder if the timeline for the company’s AI revenue ramp matches up with that dramatic stock move.
“When we put AIP on the market, we thought it would be very successful,” thanks to the market-macro fit, Karp said. Now the company is seeing “a lot of upcoming demand.”
“How and when that translates into revenue is hard to model, but I’m very optimistic,” he said.
Looking to the fourth quarter, Palantir models $599 million to $603 million in revenue along with GAAP profitability. Analysts tracked by FactSet were expecting $600 million on the top line.
Read the full article here
