In the morning session of the Allen & Company Sun Valley Conference in Sun Valley, Idaho, on July 13, 2023, Alex Karp, CEO of Palantir Technologies, confidently shared groundbreaking insights and strategies, leaving a lasting impression on attendees.
This prominent event was attended by influential figures from various industries, and Karp’s presence was highly anticipated.
Palantir, the data-analytics powerhouse, reported an impressive 13% increase in second-quarter revenue. The market responded enthusiastically, pushing up shares by as much as 3% in extended trading.
Here are the key highlights:
- EPS: Adjusted at 5 cents, surpassing analysts’ expectations of 5 cents (according to Refinitiv).
- Revenue: $533 million, matching analysts’ forecast of $533 million (according to Refinitiv).
In a remarkable turnaround, Palantir achieved $28 million in net income, equivalent to 1 cent per share, compared to the net loss of $179 million, or 9 cents per share, in the same quarter of the previous year.
Looking ahead, Palantir anticipates third-quarter revenue to be between $553 million and $557 million, surpassing analysts’ expectation of $552 million. This projection indicates a 16% growth, signaling a sequential acceleration after three years of gradual deceleration.
The management team remains confident in their expectations for net income in the third and fourth quarters. Furthermore, they predict full-year revenue to exceed $2.212 billion, surpassing the midpoint of their previous forecast from May. Analysts polled by Refinitiv had expected $2.209 billion.
CEO Alex Karp expressed great anticipation: “We anticipate that we will become eligible for inclusion in the S&P 500 after we report our financial results for Q3 2023 in early November. At that point, we will have been profitable on a cumulative basis over the preceding four quarters.” This statement reflects the company’s remarkable strides in profitability.
In a show of confidence, Palantir raised its adjusted income from operations forecast for the year to over $576 million, up from the range of $506 million to $556 million predicted in May.
Palantir’s board has also approved a buyback program for the first time, with a capacity of up to $1 billion. This decision further demonstrates the organization’s commitment to maximizing shareholder value.
The government sector remains a significant source of revenue, contributing 57% to Palantir’s total sales. During the quarter, the company secured a contract from the U.S. Special Operations Command, potentially worth up to $463 million. Notably, international government revenue experienced the highest growth rate, increasing by 31% to reach $76 million.
Ryan Taylor, Palantir’s chief legal and revenue officer, expressed disappointment in the government business’s performance during the quarter. However, he remains optimistic about future prospects.
Karp also highlighted Palantir’s ambition to monetize artificial intelligence (AI). Unlike other companies that solely produce computer-generated poetry or limit AI usage, Palantir aims to harness AI’s potential for financial gains.
Karp emphasized this objective, stating, “We will figure out how to monetize it.” He referred to Palantir’s Artificial Intelligence Platform (AIP) as a transformative technology with the ability to substantially impact America’s GDP.
Prior to the after-hours trading, Palantir’s shares had experienced an outstanding 177% increase year-to-date, significantly outperforming the S&P 500, which saw a rise of only 17%.
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