Palantir Technologies boosted its revenue guidance on Monday while reporting earnings that met analysts’ expectations, though its shares dropped by about 9% after hours. The artificial intelligence software company posted adjusted earnings of 13 cents per share, matching analyst forecasts, and generated $884 million in revenue, slightly above the anticipated $863 million. Palantir’s CEO Alex Karp emphasized the company’s role as a key player in the “tectonic shift” towards AI adoption, noting that Palantir is delivering an operating system for the modern enterprise in this new era.
The company saw significant growth in its commercial and government sectors, with commercial revenue increasing by 71% to $255 million compared to the same period last year. The government sector, which remains a cornerstone of Palantir’s business, saw sales grow by 45% to $373 million. Karp attributed this expansion to heightened adoption of its tools by the U.S. defense sector. He described the surge in demand for large language models and the software that supports them as a “stampede” and a “ravenous whirlwind of adoption.”
For the full year, Palantir now expects revenues to range between $3.89 billion and $3.90 billion, up from a prior forecast of $3.74 billion to $3.76 billion. The company also projects revenues between $934 million and $938 million in the current quarter. These optimistic projections reflect the growing demand for Palantir’s AI-powered software, particularly in the defense and commercial sectors.
Palantir’s net income for the quarter rose to $214 million, or 8 cents per share, from $105.5 million, or 4 cents per share, in the previous year. U.S. revenue increased by 55% to $628 million. The company’s strong performance is further demonstrated by its adjusted free cash flow outlook, which has been raised to between $1.6 billion and $1.8 billion for the year. During the quarter, Palantir closed 139 deals worth at least $1 million, including 51 that topped $5 million and 31 that exceeded $10 million.
Despite the recent dip in its stock price, Palantir’s performance in 2025 has defied the broader downturn in technology stocks. The company is up 64% this year, buoyed by significant defense contracts and its ongoing expansion in the AI space.
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