Palantir Technologies Inc. (NYSE:PLTR) today announced financial
results for the second quarter ended June 30, 2024.
Q2 2024 Highlights
- Revenue grew 27% year-over-year and 7% quarter-over-quarter to
$678 million
- US commercial highlights
- US commercial revenue grew 55% year-over-year and 6%
quarter-over-quarter to $159 million
- US commercial customer count grew 83% year-over-year and 13%
quarter-over-quarter to 295 customers
- US commercial remaining deal value (“RDV”) grew 103%
year-over-year and 11% quarter-over-quarter
- US government revenue grew 24% year-over-year and 8%
quarter-over-quarter to $278 million
- Commercial revenue grew 33% year-over-year and 3%
quarter-over-quarter to $307 million
- Government revenue grew 23% year-over-year and 11%
quarter-over-quarter to $371 million
- Closed 27 deals over $10 million
- Customer count grew 41% year-over-year and 7%
quarter-over-quarter
- GAAP net income of $134 million, representing a 20% margin
- GAAP income from operations of $105 million, representing a 16%
margin
- Adjusted income from operations of $254 million, representing a
margin of 37%
- Rule of 40 score of 64%
- GAAP earnings per share (“EPS”) grew 500% year-over-year to
$0.06
- Adjusted EPS grew 80% year-over-year to $0.09
- Cash, cash equivalents, and short-term US treasury securities
of $4.0 billion
- Cash from operations of $144 million, representing a 21%
margin
- Adjusted free cash flow of $149 million, representing a 22%
margin
Q2 2024 Financial Summary
(Unaudited)
(Amounts in thousands, except percentages
and per share amounts)
Second Quarter
Amount
Revenue
$
678,134
Year-over-year growth
27
%
Amount
Margin
Income from Operations
$
105,339
16
%
Adjusted Income from Operations
$
253,567
37
%
Cash from Operations
$
144,187
21
%
Adjusted Free Cash Flow
$
148,660
22
%
Net Income Attributable to Common
Stockholders
$
134,126
20
%
Adjusted Net Income Attributable to Common
Stockholders
$
221,408
Adjusted EBITDA
$
261,623
39
%
GAAP EPS, Diluted
$
0.06
Adjusted EPS, Diluted
$
0.09
Outlook
For Q3 2024, we expect:
- Revenue of between $697 - $701 million.
- Adjusted income from operations of between $233 - $237
million.
For full year 2024:
- We are raising our revenue guidance to between $2.742 - $2.750
billion.
- We are raising our US commercial revenue guidance to in excess
of $672 million, representing a growth rate of at least 47%.
- We are raising our adjusted income from operations guidance to
between $966 - $974 million.
- We continue to expect adjusted free cash flow of between $800
million - $1 billion.
- And we continue to expect GAAP operating income and net income
in each quarter of this year.
CEO Letter
Palantir CEO Alex Karp’s quarterly letter is available through
Palantir’s website at
https://www.palantir.com/newsroom/letters.
Earnings Webcast
A live public webcast will be held at 3:00 PM MT / 5:00 PM ET
today to discuss the results for our second quarter ended June 30,
2024 and financial outlook. The webcast can be accessed by
registering online at
https://palantir.events/palantirearnings-q22024. A replay of the
webcast will be available at https://investors.palantir.com
following the event.
An investor presentation, including supplemental financial
information and reconciliations of certain non-GAAP measures to
their nearest comparable GAAP measures, will be available through
Palantir’s Investor Relations website at
https://investors.palantir.com.
Forward-Looking Statements
This press release and statements on our earnings webcast
contain “forward-looking statements” within the meaning of the
“safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995, including, but not limited to, statements
regarding our financial outlook, product development and related
timing, distribution, and pricing, expected benefits of and
applications for our software platforms, business strategy and
plans (including strategy and plans relating to our Artificial
Intelligence Platform (“AIP”), sales and marketing efforts, sales
force, partnerships, and customers), investments in our business,
market trends and market size, opportunities (including growth
opportunities), our expectations regarding our existing and
potential investments in, and commercial contracts with, various
entities, our expectations regarding macroeconomic events, our
expectations regarding potential eligibility or inclusion in market
indices, our expectations regarding our share repurchase program,
and positioning. These forward-looking statements are made as of
the date they were first issued and were based on current
expectations, estimates, forecasts, and projections as well as the
beliefs and assumptions of management. Words such as “guidance,”
“expect,” “anticipate,” “should,” “believe,” “hope,” “target,”
“project,” “plan,” “goals,” “estimate,” “potential,” “predict,”
“may,” “will,” “might,” “could,” “intend,” “shall,” and variations
of these terms or the negative of these terms and similar
expressions are intended to identify these forward-looking
statements. Forward-looking statements are subject to a number of
risks and uncertainties, many of which involve factors or
circumstances that are beyond our control. Our actual results could
differ materially from those stated or implied in forward-looking
statements due to a number of factors, including but not limited to
risks detailed in our filings with the Securities and Exchange
Commission (the “SEC”), including in our Annual Report on Form 10-K
for the fiscal year ended December 31, 2023 and other filings and
reports that we may file from time to time with the SEC, including
our Quarterly Report on Form 10-Q for the quarter ended June 30,
2024. In particular, the following factors, among others, could
cause our results to differ materially from those expressed or
implied by such forward-looking statements: our ability to
successfully execute our business and growth strategy; the
sufficiency of our cash and cash equivalents to meet our liquidity
needs; the demand for our platforms, product offerings, and
services in general; our ability to increase our number of new
customers and revenue generated from customers; our ability to
realize some or all of the total contract value of customer
contracts as revenue, including any contractual options available
to customers or contractual periods that are subject to termination
for convenience provisions; our long and unpredictable sales cycle;
our ability to successfully execute our channel sales and other
strategic initiatives with third parties; our ability to retain and
expand our customer base; the fluctuation of our results of
operations and our key business measures on a quarterly basis in
future periods; the seasonality of our business; the implementation
process for our platforms, which may be complex and lengthy; our
ability to successfully develop and deploy new technologies to
address the needs of our existing or prospective customers; our
ability to make our platforms and product offerings easier to
install, consume, and use; our ability to maintain and enhance our
brand and reputation; our ability to maintain and enhance our
culture as our business grows and as we pursue our business and
financial goals; news or social media coverage about us, including
but not limited to coverage that presents, or relies on,
inaccurate, misleading, incomplete, or otherwise damaging
information; the impact of recent or future global macroeconomic
and geopolitical events, such as the ongoing Russia-Ukraine and
Israel conflicts, heightened interest rates, monetary policy
changes, or foreign currency fluctuations, on the business and
operations of our company or of our existing or prospective
customers and partners; issues raised by the use of artificial
intelligence in our platforms; and any breach or access to our or
customer or third-party data.
The forward-looking statements included in this press release
represent our views as of the date of this press release. We
anticipate that subsequent events and developments will cause our
views to change. We undertake no intention or obligation to update
or revise any forward-looking statements, whether as a result of
new information, future events, or otherwise. These forward-looking
statements should not be relied upon as representing our views as
of any date subsequent to the date of this press release. Past
performance is not necessarily indicative of future results.
Additional Definitions
For the purpose of this press release, our earnings webcast, and
our CEO’s letter:
- Total contract value (“TCV”) is the total potential lifetime
value of contracts entered into with, or awarded by, our customers
at the time of contract execution, annual contract value (“ACV”)
closed is defined as the total value of contracts closed in the
period divided by the dollar-weighted average contract duration of
those same contracts, and remaining deal value (“RDV”) is the total
remaining value of contracts as of the end of the reporting period.
Except as noted below, TCV, ACV, and RDV each presume the exercise
of all contract options available to our customers and no
termination of contracts. However, the majority of our contracts
are subject to termination provisions, including for convenience,
and there can be no guarantee that contracts are not terminated or
that contract options will be exercised. Further, RDV may exclude
all or some portion of the value of certain commercial contracts as
a result of our ongoing assessments of customers’ financial
condition, including the consideration of such customers’ ability
and intention to pay, and whether such contracts continue to meet
the criteria for revenue recognition, among other factors.
- Remaining performance obligations (“RPO”) reflect the total
values of contracts that have been entered into with, or awarded
by, our customers, and represent non-cancelable contracted revenue
that has not yet been recognized, which includes deferred revenue
and, in certain instances, amounts that will be invoiced. We have
elected the practical expedient, as permitted under Accounting
Standards Codification 606—Revenue from Contracts with Customers,
to not disclose remaining performance obligations for contracts
with original terms of twelve months or less.
- The term “Strategic Commercial Contracts” is as defined in our
Quarterly Report on Form 10-Q filed on May 7, 2024.
- The term “Rule of 40” refers to the sum of our revenue growth
rate year-over-year and our adjusted operating margin for each of
the periods presented.
Non-GAAP Financial Measures
This press release and the accompanying tables, as well as our
earnings webcast and our CEO’s letter, contain the non-GAAP
financial measures adjusted income from operations, which excludes
stock-based compensation and related employer payroll taxes;
adjusted operating margin; adjusted free cash flow; adjusted free
cash flow margin; adjusted earnings before interest, taxes,
depreciation, and amortization (“adjusted EBITDA”); adjusted EBITDA
margin; adjusted net income attributable to common stockholders;
and adjusted EPS, diluted.
We believe these non-GAAP financial measures and other metrics
described in this press release help us evaluate our business,
identify trends affecting Palantir’s business, formulate business
plans and financial projections, and make strategic decisions. We
exclude stock-based compensation, which is a non-cash expense, from
these non-GAAP financial measures because we believe that excluding
this item provides meaningful supplemental information regarding
operational performance and provides useful information to
investors and others in understanding and evaluating our operating
results in the same manner as our management team. We exclude
employer payroll taxes related to stock-based compensation as it is
difficult to predict and outside of Palantir’s control.
Our definitions may differ from the definitions used by other
companies and therefore comparability may be limited. In addition,
other companies may not publish these or similar metrics. Further,
these metrics have certain limitations as they do not include the
impact of certain expenses that are reflected in our consolidated
statements of operations. For example, adjusted free cash flow does
not reflect our future contractual commitments or the total
increase or decrease in our cash balances for a given period. Thus,
our non-GAAP financial measures should be considered in addition
to, not as a substitute for, or in isolation from, measures
prepared in accordance with GAAP.
We compensate for these limitations by providing a
reconciliation of each of these non-GAAP measures to the most
comparable GAAP measure. We encourage investors and others to
review our business, results of operations, and financial
information in their entirety, not to rely on any single financial
measure, and to view these non-GAAP measures in conjunction with
the most directly comparable GAAP financial measure.
A reconciliation table of the most comparable GAAP financial
measure to each non-GAAP financial measure used in this press
release is included at the end of this release. A reconciliation of
non-GAAP guidance measures to corresponding GAAP measures is not
available on a forward-looking basis without unreasonable effort
due to the uncertainty regarding, and the potential variability of,
reconciling items that may be incurred in the future, such as
stock-based compensation and related employer payroll taxes, the
effect of which may be significant.
Available Information
Palantir uses its Investor Relations website at
https://investors.palantir.com as a means of disclosing material
non-public information and for complying with its disclosure
obligations under Regulation FD. Accordingly, investors should
monitor Palantir’s Investor Relations website, in addition to
following our press releases, SEC filings, public conference calls,
and webcasts.
About Palantir Technologies Inc.
Foundational software of tomorrow. Delivered today. Additional
information is available at https://www.palantir.com.
Palantir Technologies Inc. Condensed
Consolidated Statements of Operations (in thousands, except per
share amounts) (unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Revenue
$
678,134
$
533,317
$
1,312,472
$
1,058,503
Cost of revenue (1)
128,562
106,899
244,818
214,544
Gross profit
549,572
426,418
1,067,654
843,959
Operating expenses:
Sales and marketing (1)
196,809
184,163
389,986
371,256
Research and development (1)
108,781
99,533
218,821
189,633
General and administrative (1)
138,643
132,648
272,627
268,881
Total operating expenses
444,233
416,344
881,434
829,770
Income from operations
105,339
10,074
186,220
14,189
Interest income
46,593
30,310
89,945
51,163
Other income (expense), net
(11,173
)
(10,341
)
(24,680
)
(14,477
)
Income before provision for income
taxes
140,759
30,043
251,485
50,875
Provision for income taxes
5,189
2,171
9,844
3,852
Net income
135,570
27,872
241,641
47,023
Less: Net income (loss) attributable to
noncontrolling interests
1,444
(255
)
1,985
2,094
Net income attributable to common
stockholders
$
134,126
$
28,127
$
239,656
$
44,929
Net earnings per share attributable to
common stockholders, basic
$
0.06
$
0.01
$
0.11
$
0.02
Net earnings per share attributable to
common stockholders, diluted
$
0.06
$
0.01
$
0.10
$
0.02
Weighted-average shares of common stock
outstanding used in computing net earnings per share attributable
to common stockholders, basic
2,231,592
2,131,224
2,222,569
2,119,567
Weighted-average shares of common stock
outstanding used in computing net earnings per share attributable
to common stockholders, diluted
2,414,696
2,278,155
2,407,402
2,252,205
—————
(1)
Includes stock-based compensation expense
as follows (in thousands):
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Cost of revenue
$
12,402
$
8,004
$
22,818
$
17,181
Sales and marketing
48,314
38,131
90,470
77,666
Research and development
29,943
23,192
56,817
43,116
General and administrative
51,105
44,874
97,310
90,952
Total stock-based compensation
$
141,764
$
114,201
$
267,415
$
228,915
Palantir Technologies Inc. Condensed
Consolidated Balance Sheets (in thousands) (unaudited)
As of June 30,
As of December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
512,659
$
831,047
Marketable securities
3,485,800
2,843,132
Accounts receivable, net
659,339
364,784
Prepaid expenses and other current
assets
115,712
99,655
Total current assets
4,773,510
4,138,618
Property and equipment, net
43,483
47,758
Operating lease right-of-use assets
213,453
182,863
Other assets
161,434
153,186
Total assets
$
5,191,880
$
4,522,425
Liabilities and Equity
Current liabilities:
Accounts payable
$
67,345
$
12,122
Accrued liabilities
195,489
222,991
Deferred revenue
278,441
246,901
Customer deposits
221,519
209,828
Operating lease liabilities
44,125
54,176
Total current liabilities
806,919
746,018
Deferred revenue, noncurrent
15,649
28,047
Customer deposits, noncurrent
1,527
1,477
Operating lease liabilities,
noncurrent
214,334
175,216
Other noncurrent liabilities
15,645
10,702
Total liabilities
1,054,074
961,460
Stockholders’ equity:
Common stock
2,238
2,200
Additional paid-in capital
9,463,178
9,122,173
Accumulated other comprehensive income
(loss), net
(4,935
)
801
Accumulated deficit
(5,409,957
)
(5,649,613
)
Total stockholders’ equity
4,050,524
3,475,561
Noncontrolling interests
87,282
85,404
Total equity
4,137,806
3,560,965
Total liabilities and equity
$
5,191,880
$
4,522,425
Palantir Technologies Inc. Condensed
Consolidated Statements of Cash Flows (in thousands)
(unaudited)
Six Months Ended June
30,
2024
2023
Operating activities
Net income
$
241,641
$
47,023
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
16,494
16,719
Stock-based compensation
267,415
228,915
Noncash operating lease expense
22,439
22,724
Unrealized and realized (gain) loss from
marketable securities, net
20,042
11,078
Noncash consideration
(26,484
)
(20,166
)
Other operating activities
(11,088
)
(17,817
)
Changes in operating assets and
liabilities:
Accounts receivable, net
(298,311
)
(113,663
)
Prepaid expenses and other current
assets
(2,774
)
1,091
Other assets
5,571
(3,485
)
Accounts payable
53,372
(39,057
)
Accrued liabilities
(30,548
)
13,780
Deferred revenue, current and
noncurrent
21,463
115,868
Customer deposits, current and
noncurrent
11,806
40,144
Operating lease liabilities, current and
noncurrent
(23,778
)
(25,603
)
Other noncurrent liabilities
6,506
17
Net cash provided by operating
activities
273,766
277,568
Investing activities
Purchases of property and equipment
(5,543
)
(8,689
)
Purchases of marketable securities
(1,784,115
)
(2,936,939
)
Proceeds from sales and redemption of
marketable securities
1,133,535
948,866
Proceeds from sales of alternative
investments
—
51,072
Other investing activities
(4,000
)
—
Net cash used in investing activities
(660,123
)
(1,945,690
)
Financing activities
Proceeds from the exercise of common stock
options
99,870
116,273
Repurchases of common stock
(26,699
)
—
Other financing activities
102
394
Net cash provided by financing
activities
73,273
116,667
Effect of foreign exchange on cash, cash
equivalents, and restricted cash
(4,948
)
(1,855
)
Net decrease in cash, cash equivalents,
and restricted cash
(318,032
)
(1,553,310
)
Cash, cash equivalents, and restricted
cash - beginning of period
850,107
2,627,335
Cash, cash equivalents, and restricted
cash - end of period
$
532,075
$
1,074,025
Palantir Technologies Inc. Reconciliation of
GAAP to Non-GAAP Financial Measures (unaudited)
Non-GAAP Reconciliations
Adjusted Income from Operations and Adjusted Operating Margin
(in thousands, except percentages)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Income from operations
$
105,339
$
10,074
$
186,220
$
14,189
Add: stock-based compensation
141,764
114,201
267,415
228,915
Add: employer payroll taxes related to
stock-based compensation
6,464
10,760
26,390
17,045
Adjusted income from operations
$
253,567
$
135,035
$
480,025
$
260,149
Adjusted operating margin
37
%
25
%
37
%
25
%
Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin
(in thousands, except percentages)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net cash provided by operating
activities
$
144,187
$
90,192
$
273,766
$
277,568
Add: cash paid for employer payroll taxes
related to stock-based compensation
7,352
9,770
29,071
16,046
Less: purchases of property and
equipment
(2,879
)
(3,934
)
(5,543
)
(8,689
)
Adjusted free cash flow
$
148,660
$
96,028
$
297,294
$
284,925
Adjusted free cash flow margin
22
%
18
%
23
%
27
%
Adjusted EBITDA and Adjusted EBITDA Margin (in thousands,
except percentages)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net income attributable to common
stockholders
$
134,126
$
28,127
$
239,656
$
44,929
Add: net income (loss) attributable to
noncontrolling interests
1,444
(255
)
1,985
2,094
Less: interest income
(46,593
)
(30,310
)
(89,945
)
(51,163
)
Add: other (income) expense, net
11,173
10,341
24,680
14,477
Add: provision for income taxes
5,189
2,171
9,844
3,852
Add: depreciation and amortization
8,056
8,399
16,494
16,719
Add: stock-based compensation
141,764
114,201
267,415
228,915
Add: employer payroll taxes related to
stock-based compensation
6,464
10,760
26,390
17,045
Adjusted EBITDA
$
261,623
$
143,434
$
496,519
$
276,868
Adjusted EBITDA margin
39
%
27
%
38
%
26
%
Adjusted Net Income Attributable to Common Stockholders and
Adjusted Earnings Per Share, Diluted (in thousands, except per
share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net income attributable to common
stockholders
$
134,126
$
28,127
$
239,656
$
44,929
Add: stock-based compensation
141,764
114,201
267,415
228,915
Add: employer payroll taxes related to
stock-based compensation
6,464
10,760
26,390
17,045
Less: income tax effects and adjustments
(1)
(60,946
)
(33,539
)
(115,116
)
(63,939
)
Adjusted net income attributable to common
stockholders
$
221,408
$
119,549
$
418,345
$
226,950
Weighted-average shares used in computing
GAAP earnings per share, diluted
2,414,696
2,278,155
2,407,402
2,252,205
Adjusted weighted-average shares used in
computing adjusted earnings per share, diluted
2,414,696
2,278,155
2,407,402
2,252,205
Adjusted earnings per share, diluted
$
0.09
$
0.05
$
0.17
$
0.10
———— (1) Income tax effect is based on a
long-term estimated annual effective tax rate of 23.0% for the
periods ended 2024 and 2023.
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