Palantir Technologies Inc. (NYSE:PLTR) today announced financial
results for the first quarter ended March 31, 2024.
Q1 2024 Highlights
- GAAP net income of $106 million, representing a 17% margin
- Sixth consecutive quarter of GAAP profitability
- GAAP income from operations of $81 million, representing a 13%
margin
- Fifth consecutive quarter of GAAP operating profitability
- GAAP earnings per share (“EPS”) of $0.04
- Adjusted EPS of $0.08
- Revenue grew 21% year-over-year and 4% quarter-over-quarter to
$634 million
- US commercial highlights
- US commercial revenue grew 40% year-over-year and 14%
quarter-over-quarter to $150 million
- US commercial customer count grew 69% year-over-year and 19%
quarter-over-quarter to 262 customers
- US commercial remaining deal value (“RDV”) grew 74%
year-over-year and 14% quarter-over-quarter
- Commercial revenue grew 27% year-over-year and 5%
quarter-over-quarter to $299 million
- Government revenue grew 16% year-over-year and 3%
quarter-over-quarter to $335 million
- US government revenue grew 12% year-over-year and 8%
quarter-over-quarter to $257 million
- Customer count grew 42% year-over-year and 11%
quarter-over-quarter
- Adjusted income from operations of $226 million, representing a
margin of 36%
- Sixth consecutive quarter of expanding adjusted operating
margins
- Rule of 40 score of 57%
- Cash from operations of $130 million, representing a 20%
margin
- Adjusted free cash flow of $149 million, representing a 23%
margin
- Cash, cash equivalents, and short-term US treasury securities
of $3.9 billion
Q1 2024 Financial Summary
(Unaudited)
(Amounts in thousands, except percentages
and per share amounts)
First Quarter
Amount
Revenue
$
634,338
Year-over-year growth
21
%
Amount
Margin
Income from Operations
$
80,881
13
%
Adjusted Income from Operations
$
226,458
36
%
Cash from Operations
$
129,579
20
%
Adjusted Free Cash Flow
$
148,634
23
%
Net Income Attributable to Common
Stockholders
$
105,530
17
%
Adjusted Net Income Attributable to Common
Stockholders
$
196,937
Adjusted EBITDA
$
234,896
37
%
GAAP EPS, Diluted
$
0.04
Adjusted EPS, Diluted
$
0.08
Outlook
For Q2 2024, we expect:
- Revenue of between $649 – $653 million.
- Adjusted income from operations of between $209 – $213
million.
For full year 2024:
- We are raising our revenue guidance to between $2.677 – $2.689
billion.
- We are raising our US commercial revenue guidance to in excess
of $661 million, representing a growth rate of at least 45%.
- We are raising our adjusted income from operations guidance to
between $868 – $880 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 first quarter ended March 31,
2024 and financial outlook. The webcast can be accessed by
registering online at
https://palantir.events/palantir-earnings-q1-2024. 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 March 31,
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 on 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 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 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
annual report on Form 10-K for the fiscal year ended December 31,
2023.
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 March
31,
2024
2023
Revenue
$
634,338
$
525,186
Cost of revenue (1)
116,256
107,645
Gross profit
518,082
417,541
Operating expenses:
Sales and marketing (1)
193,177
187,093
Research and development (1)
110,040
90,100
General and administrative (1)
133,984
136,233
Total operating expenses
437,201
413,426
Income from operations
80,881
4,115
Interest income
43,352
20,853
Other income (expense), net
(13,507
)
(4,136
)
Income before provision for income
taxes
110,726
20,832
Provision for income taxes
4,655
1,681
Net income
106,071
19,151
Less: Net income attributable to
noncontrolling interests
541
2,349
Net income attributable to common
stockholders
$
105,530
$
16,802
Net earnings per share attributable to
common stockholders, basic
$
0.05
$
0.01
Net earnings per share attributable to
common stockholders, diluted
$
0.04
$
0.01
Weighted-average shares of common stock
outstanding used in computing net earnings per share attributable
to common stockholders, basic
2,213,545
2,107,780
Weighted-average shares of common stock
outstanding used in computing net earnings per share attributable
to common stockholders, diluted
2,400,107
2,217,439
(1)
Includes stock-based compensation expense
as follows (in thousands):
Three Months Ended March
31,
2024
2023
Cost of revenue
$
10,416
$
9,177
Sales and marketing
42,156
39,535
Research and development
26,874
19,924
General and administrative
46,205
46,078
Total stock-based compensation
$
125,651
$
114,714
Palantir Technologies
Inc.
Condensed Consolidated Balance
Sheets
(in thousands)
(unaudited)
As of March 31,
As of December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
520,388
$
831,047
Marketable securities
3,347,512
2,843,132
Accounts receivable, net
486,986
364,784
Prepaid expenses and other current
assets
81,178
99,655
Total current assets
4,436,064
4,138,618
Property and equipment, net
46,906
47,758
Operating lease right-of-use assets
173,707
182,863
Other assets
150,402
153,186
Total assets
$
4,807,079
$
4,522,425
Liabilities and Equity
Current liabilities:
Accounts payable
$
35,634
$
12,122
Accrued liabilities
206,034
222,991
Deferred revenue
237,195
246,901
Customer deposits
217,634
209,828
Operating lease liabilities
54,056
54,176
Total current liabilities
750,553
746,018
Deferred revenue, noncurrent
20,722
28,047
Customer deposits, noncurrent
1,651
1,477
Operating lease liabilities,
noncurrent
163,013
175,216
Other noncurrent liabilities
9,968
10,702
Total liabilities
945,907
961,460
Stockholders’ equity:
Common stock
2,227
2,200
Additional paid-in capital
9,322,803
9,122,173
Accumulated other comprehensive income
(loss), net
(5,720
)
801
Accumulated deficit
(5,544,083
)
(5,649,613
)
Total stockholders’ equity
3,775,227
3,475,561
Noncontrolling interests
85,945
85,404
Total equity
3,861,172
3,560,965
Total liabilities and equity
$
4,807,079
$
4,522,425
Palantir Technologies
Inc.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended March
31,
2024
2023
Operating activities
Net income
$
106,071
$
19,151
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
8,438
8,320
Stock-based compensation
125,651
114,714
Noncash operating lease expense
12,366
10,836
Unrealized and realized (gain) loss from
marketable securities, net
12,354
8,508
Noncash consideration
(11,907
)
(7,596
)
Other operating activities
(6,774
)
(6,670
)
Changes in operating assets and
liabilities:
Accounts receivable, net
(121,884
)
2,709
Prepaid expenses and other current
assets
19,399
1,252
Other assets
3,525
(4,551
)
Accounts payable
23,809
(39,921
)
Accrued liabilities
(19,105
)
4,271
Deferred revenue, current and
noncurrent
(14,802
)
43,238
Customer deposits, current and
noncurrent
7,953
43,631
Operating lease liabilities, current and
noncurrent
(15,482
)
(10,536
)
Other noncurrent liabilities
(33
)
20
Net cash provided by operating
activities
129,579
187,376
Investing activities
Purchases of property and equipment
(2,664
)
(4,755
)
Purchases of marketable securities
(1,260,327
)
(2,310,367
)
Proceeds from sales and redemption of
marketable securities
751,746
709,459
Proceeds from sales of alternative
investments
—
51,072
Net cash used in investing activities
(511,245
)
(1,554,591
)
Financing activities
Proceeds from the exercise of common stock
options
83,840
25,924
Repurchases of common stock
(9,000
)
—
Other financing activities
408
59
Net cash provided by financing
activities
75,248
25,983
Effect of foreign exchange on cash, cash
equivalents, and restricted cash
(4,024
)
2,676
Net decrease in cash, cash equivalents,
and restricted cash
(310,442
)
(1,338,556
)
Cash, cash equivalents, and restricted
cash - beginning of period
850,107
2,627,335
Cash, cash equivalents, and restricted
cash - end of period
$
539,665
$
1,288,779
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 March
31,
2024
2023
Income from operations
$
80,881
$
4,115
Add: stock-based compensation
125,651
114,714
Add: employer payroll taxes related to
stock-based compensation
19,926
6,285
Adjusted income from operations
$
226,458
$
125,114
Adjusted operating margin
36
%
24
%
Adjusted Free Cash Flow and Adjusted
Free Cash Flow Margin (in thousands, except percentages)
Three Months Ended March
31,
2024
2023
Net cash provided by operating
activities
$
129,579
$
187,376
Add: cash paid for employer payroll taxes
related to stock-based compensation
21,719
6,276
Less: purchases of property and
equipment
(2,664
)
(4,755
)
Adjusted free cash flow
$
148,634
$
188,897
Adjusted free cash flow margin
23
%
36
%
Adjusted EBITDA and Adjusted EBITDA
Margin (in thousands, except percentages)
Three Months Ended March
31,
2024
2023
Net income attributable to common
stockholders
$
105,530
$
16,802
Add: net income attributable to
noncontrolling interests
541
2,349
Less: interest income
(43,352
)
(20,853
)
Add: other (income) expense, net
13,507
4,136
Add: provision for income taxes
4,655
1,681
Add: depreciation and amortization
8,438
8,320
Add: stock-based compensation
125,651
114,714
Add: employer payroll taxes related to
stock-based compensation
19,926
6,285
Adjusted EBITDA
$
234,896
$
133,434
Adjusted EBITDA margin
37
%
25
%
Adjusted Net Income Attributable to
Common Stockholders and Adjusted Earnings Per Share, Diluted (in
thousands, except per share amounts)
Three Months Ended March
31,
2024
2023
Net income attributable to common
stockholders
$
105,530
$
16,802
Add: stock-based compensation
125,651
114,714
Add: employer payroll taxes related to
stock-based compensation
19,926
6,285
Less: income tax effects and adjustments
(1)
(54,170
)
(30,400
)
Adjusted net income attributable to common
stockholders
$
196,937
$
107,401
Weighted-average shares used in computing
GAAP earnings per share, diluted
2,400,107
2,217,439
Adjusted weighted-average shares used in
computing adjusted earnings per share, diluted
2,400,107
2,217,439
Adjusted earnings per share, diluted
$
0.08
$
0.05
(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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