Palantir Q3 2025: Record Growth, 114% Rule of 40, and a Defining Moment for Enterprise AI

Core Insights - Palantir Technologies achieved its strongest quarter ever, with a 63% year-over-year revenue increase and a 114% Rule of 40 score, indicating exceptional growth and profitability [1][3] - The U.S. commercial business saw a remarkable 121% growth year-over-year, contributing significantly to the overall revenue of $1.18 billion for Q3 2025 [2][3] Revenue and Profitability Milestones - Quarterly revenue reached $1.18 billion, with U.S. operations making up 75% of the total [2] - The U.S. commercial segment closed $1.3 billion in total contract value, growing 121% year-over-year and 29% sequentially [2] Financial Performance - Adjusted operating margins were reported at 51%, with adjusted free cash flow hitting $540 million for the quarter, leading to a trailing 12-month figure of $2 billion [3] - Full-year revenue guidance was raised to $4.4 billion, with a projected 61% year-over-year growth for Q4 [3] AIP at the Core of Enterprise Transformation - Palantir closed 204 deals over $1 million and 53 deals over $10 million, indicating strong enterprise adoption of AIP as a comprehensive platform [4] - The emphasis on C-suite-led transformations highlights the necessity of AI for competitive advantage across various industries [4] Technology Advantage - Palantir's long-term investment in Ontology and workflow integration has created a competitive moat, enabling efficient AI implementation [5] - Tools like AI FDE and AI Hivemind are significantly enhancing productivity, with AI FDE reducing project timelines from years to days [5] Vision and Culture - The company aims to align its mission with the value creation for clients and their employees, contrasting its culture with traditional enterprise software firms [6] - Palantir's initiatives, such as the American Tech Fellowship, focus on empowering American workers through AI training [7] Market Position - The company asserts its ownership of a significant portion of the AI market that prioritizes value creation, reflecting its ongoing momentum and strategic focus [8]