Palantir Technologies, Inc.
Top-line Beat: Overall, Palantir delivered another "Jalen Brunson-like" performance - referring to the New York Knicks point guard - with its AIP leading the way, said Ives in a note.
He noted that total revenue climbed 21% year-over-year to $634.3 million, exceeding the consensus estimate of $615.3 million and the guidance range of $612 million to $616 million.
The analyst attributes the top-line outperformance to the continued adoption of their Foundry platform (AIP) across both commercial and government sectors.
Commercial Segment Shines: U.S. commercial revenue remained strong, rising to $150 million (up 40% year-over-year). Notably, the customer count jumped 69%, and the company closed 136 U.S. commercial deals, up a significant 94%.
The broader Commercial segment, including international operations, saw total revenue growth of 27% to $299 million. Ives credits the company's "boot-camp conversion strategy" for this success.
Government Business Sees Modest Growth: Palantir's U.S. government business experienced 12% revenue growth to $257 million. The analyst suggests their focus on building a better data platform and defense capabilities contributed to this growth. Additionally, Ives highlights increased demand for various products supporting critical missions globally.
Other Key Metrics: Operating margin was at 35.7%, exceeding both the consensus and the guidance. This indicates the company is achieving operating leverage at scale. Free cash flow, however, came in at $148.6 million, representing a 23% margin. This is significantly lower than the prior period's $305.0 million (50% margin), likely due to aggressive investment in AIP.
Looking Ahead: Palantir raised its 2024 revenue and operating income guidance based on continued market share capture with AIP across both commercial and government segments. Total revenue is estimated to be in the range of $2.667 billion to $2.689 billion.
The company reaffirmed its adjusted free cash flow guidance of $800 million to $1 billion.
"We are laser-focused on the AI story playing out with AIP leading the way and Palantir delivered robust numbers on this front yet again," Ives said, adding that any modest sell-off post-print is "a golden buying opportunity."
The Palantir Price Action: In premarket trading, Palantir shed 11.27% to $22.37, according to Benzinga Pro data.
