Palantir Quietly Delivered Massive Customer Growth in Q3. Here's Why It Matters.

Core Viewpoint - Palantir Technologies is experiencing rapid growth in its customer base, which is expected to drive stronger revenue and earnings growth in the future despite recent stock price volatility due to high valuation concerns and broader market trends [1][2][3]. Customer Growth - Palantir's customer base grew by 45% year-over-year in Q3 2025, with commercial customers increasing by 49%, surpassing the previous year's growth of 39% [5]. - The company's Artificial Intelligence Platform (AIP) is a significant factor in attracting new customers, enabling them to integrate generative AI into their operations [4][5]. Revenue Pipeline - Palantir reported a total contract value (TCV) bookings of $2.8 billion in Q3, marking a 151% year-over-year increase, with a net dollar retention rate of 134%, up 600 basis points from the previous quarter [10]. - The remaining deal value reached $8.6 billion, a 91% increase from the same quarter last year, indicating a robust revenue pipeline that is more than double the $3.44 billion generated in the past 12 months [12]. Financial Performance - The company achieved a 63% year-over-year increase in revenue, totaling $1.18 billion, while adjusted earnings rose by 110% to $0.21 per share [13]. - Palantir's adjusted operating margin reached 51%, a 13 percentage point increase from the previous year, highlighting the positive unit economics driven by customer expansions [14]. Market Outlook - The AI software platforms market is projected to grow over 12 times in the next decade, potentially generating more than $237 billion in annual revenue by 2034, with Palantir's growth outpacing the expected 29% annual growth of the market [6]. - Analysts forecast a 36% increase in Palantir's earnings in 2026, following a 76% jump in the current year, suggesting continued strong performance [15][16].