Palantir Technologies(PLTR) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company achieved a revenue growth of 63% year-over-year and 18% sequentially, reaching $1.181 billion in Q3 [3][16] - The Rule of 40 score increased to 114, up 46 percentage points year-over-year and 20 percentage points since the last quarter [3][14] - Adjusted operating margin reached 51%, exceeding prior guidance by 500 basis points [15][22] - The company generated $2 billion in trailing 12-month adjusted free cash flow for the first time [16][24] Business Line Data and Key Metrics Changes - U.S. commercial revenue grew 121% year-over-year and 29% sequentially, contributing significantly to overall performance [3][15] - U.S. government revenue increased by 52% year-over-year and 14% sequentially, driven by mission-critical capabilities [6][20] - The commercial segment reported a revenue growth of 73% year-over-year and 22% sequentially [17] Market Data and Key Metrics Changes - The U.S. market accounted for three-fourths of the company's business in Q3, with a growth rate of 77% year-over-year [3][15] - International commercial revenue grew 10% year-over-year and 5% sequentially, with targeted growth opportunities in Asia and the Middle East [19] Company Strategy and Development Direction - The company is focused on delivering AI leverage through its AIP platform, emphasizing value creation for customers [4][5] - There is a clear trend of customers transitioning to larger enterprise agreements, indicating a shift towards enterprise-wide AI adoption [5][6] - The company aims to maintain its unique position in the market by integrating advanced AI capabilities with its existing software solutions [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the extraordinary momentum heading into Q4, with a clear mission to deliver AI capabilities that turn promise into performance [7][14] - The company anticipates continued strong demand for its products, particularly in the U.S. commercial sector, with guidance for Q4 revenue between $1.327 billion and $1.331 billion [24][25] - Management highlighted the importance of maintaining internal focus and aligning with customer needs to sustain growth [48][49] Other Important Information - The company closed its highest-ever TCV quarter at $2.8 billion, up 151% year-over-year [4][16] - Customer count grew 45% year-over-year, reaching 911 customers [16][21] - The company repurchased approximately 2.6 million shares as part of its share repurchase program [24] Q&A Session Summary Question: What do you see as Palantir's unique differentiator? - The company builds software that works in the real world, focusing on solving customer problems rather than just selling software [34][35] Question: Can you walk through the accelerated sales cycles observed? - Customers are increasingly approaching the company with a desire to deploy solutions across their entire organization, reflecting a shift in expectations [37][39] Question: What changed from a behavioral perspective among customers? - Customers are recognizing the limitations of other solutions and are eager to adopt Palantir's offerings for tangible results [42][44] Question: How does the company plan to maintain its unique attributes internally? - The company emphasizes the importance of staying close to the problem and ensuring that its products continue to improve [48][49]