Financial Data and Key Metrics Changes - Revenue grew 39% year over year, exceeding prior guidance by nearly 350 basis points, representing an 1,800 basis point increase compared to Q1 of last year [22] - Adjusted operating margin was 44%, an increase of 800 basis points year over year [24] - Rule of 40 score increased from 81 in Q4 2024 to 83 in Q1 2025 [5][24] - Adjusted free cash flow was $370 million, representing a margin of 42% [38] Business Line Data and Key Metrics Changes - US revenue grew 55% year over year, accounting for 71% of overall business [4][24] - US commercial revenue grew 71% year over year and 19% sequentially, surpassing a billion-dollar annual run rate for the first time [6][30] - US Government revenue grew 45% year over year and 9% sequentially [24][32] - International commercial revenue declined 5% year over year and 11% sequentially due to headwinds in Europe [31] Market Data and Key Metrics Changes - Customer count grew 39% year over year to 769 customers [26] - Revenue from the top 20 customers increased 26% year over year to $70 million per customer [26] - Total remaining deal value in the US commercial business grew 127% year over year [30] Company Strategy and Development Direction - The company is focused on leveraging AI to drive business outcomes and enhance enterprise autonomy through its AIP platform [14][15] - Continued investment in technical talent and product pipeline is expected to support sustained GAAP profitability [36] - The company aims to capitalize on the growing demand for AI in both commercial and government sectors [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver tangible impact for customers amid economic uncertainty [12] - The company anticipates continued demand for its software solutions, particularly in the context of government efficiency and AI adoption [11][54] - Management highlighted the importance of adaptability in the current market landscape, emphasizing that organizations are reimagining their operations to survive [11] Other Important Information - The company closed $930 million in commercial TCV bookings, representing 84% growth year over year [28] - Adjusted gross margin was 82% for the quarter [35] - The company ended the quarter with $5.4 billion in cash and cash equivalents [38] Q&A Session Summary Question: How does Palantir plan to sustain its competitive advantage in AI? - The company's advantage lies in its ontology, which positions AIP as a platform to capture the capabilities of LLMs and translate them into business value [50][51] Question: How will the current US administration's focus on reducing federal spend impact contracts? - The company welcomes the focus on reducing ineffective spending and believes it will lead to better outcomes for its software solutions [52][53] Question: Is there an opportunity to gain more share of budgets in the government sector? - The company is optimistic about gaining budget share in the US, especially in environments under pressure where meritocracy is emphasized [56][57] Question: Are there opportunities for software to add value in European defense buildup? - The company is interested in helping Europe with manufacturing challenges and believes there is significant potential for its software solutions [63][64]
Palantir Technologies(PLTR) - 2025 Q1 - Earnings Call Transcript