Palantir surpasses $1 billion in quarterly revenue

Palantir surpassed Wall Street estimates on Monday, exceeding $1 billion in quarterly revenue for the first time and raising its year-end forecast.

The company’s shares gained 3% in after-hours trading. Palantir’s revenue increased by 48% during this period.

Analysts had not expected the Denver-based company to reach its $1 billion revenue target until the fourth quarter of this year.

In an interview with CNBC‘s Morgan Brennan, CEO Alex Karp said, “We plan to reduce our employee count while increasing our revenue. This is a crazy and efficient revolution. Our goal is to increase our revenue tenfold and reach 3,600 employees. We currently have 4,100 employees.”

Karp did not specify whether the company would lay off employees to reach its ideal staff count.

The software analytics company also raised its year-end expectations. Palantir now expects its full-year revenue to be between $4.142 billion and $4.150 billion, up from the previous forecast of $3.89 billion to $3.90 billion.

Palantir forecasted revenue between $1.083 billion and $1.087 billion for the third quarter, exceeding analysts’ estimates of $983 million. Palantir also raised its operating income and full-year free cash flow forecast.

Palantir’s US revenue increased by 68% year-over-year to $733 million, while its US commercial revenue nearly doubled year-over-year to $306 million.

Palantir received a significant boost from President Donald Trump’s government efficiency campaign, which involved layoffs and contract reductions.

Palantir’s revenue from the US government reached $426 million, a 53% increase compared to the same period last year.

In a letter to shareholders, Karp wrote, “This has been a steep, upward climb, a reflection of the extraordinary convergence of the emergence of language models, the development of the chips necessary to run them, and our software infrastructure.”

Palantir announced it signed 66 deals worth at least $5 million each and 42 deals worth at least $10 million each this quarter. The total value of the company’s contracts reached $2.27 billion, a 140% increase from last year.

Net income was approximately $326.7 million, or 13 cents per share, a 144% increase from about $134.1 million, or 6 cents per share, a year ago.

Palantir shares have more than doubled in value this year as investors gained confidence in the company’s artificial intelligence tools and its contracts with governments.

The company’s market capitalization exceeded $379 billion, placing it on the list of the top 20 most valuable US companies and joining the top 10 US technology companies by market cap, surpassing Salesforce, IBM, and Cisco. The shares hit a new record on Monday.

Last week, the company signed a $10 billion software and data contract with the US military.

According to FactSet, the shares are currently trading at 276 times forward earnings. Tesla is the only other company with a triple-digit ratio, at 177.