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

Financial Data and Key Metrics Changes - Overall revenue grew 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 last quarter [3][14] - Adjusted operating margin reached 51%, exceeding prior guidance by 500 basis points [15][22] - Adjusted free cash flow for the trailing 12 months reached $2 billion for the first time [16][24] Business Line Data and Key Metrics Changes - U.S. commercial business revenue grew 121% year-over-year and 29% sequentially, accounting for 34% of overall revenue [4][15] - U.S. government business revenue grew 52% year-over-year and 14% sequentially [6][20] - Commercial revenue grew 73% year-over-year and 22% sequentially, surpassing U.S. government revenue for the fourth consecutive quarter [17][19] Market Data and Key Metrics Changes - Customer count increased by 45% year-over-year to 911 customers [16] - Revenue from the top 20 customers increased 38% year-over-year to $83 million per customer [16] - Total remaining deal value in the U.S. commercial business grew 199% year-over-year [19][21] Company Strategy and Development Direction - The company is focused on delivering AI leverage through AIP, emphasizing the importance of enterprise-wide AI adoption [5][7] - AIP is positioned as the only platform capable of delivering transformational impact in the enterprise AI market [6][10] - The company aims to maintain its unique culture and focus on value creation for customers while expanding its product offerings [66][67] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum heading into Q4, with a clear mission to deliver production capabilities that turn AI from promise into performance [7][14] - The company highlighted the growing demand for AI in both commercial and government sectors, with significant opportunities ahead [68][69] - Management noted the importance of aligning internal dynamics with customer needs to sustain growth [66][67] Other Important Information - The company closed its highest-ever TCV quarter at $2.8 billion, up 151% year-over-year [16][20] - Adjusted gross margin was reported at 84% for the quarter [22] - 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 that others may not understand? - The company builds software that works for the real world, focusing on solving problems rather than just selling software [36][37] Question: Can you walk through the accelerated sales cycles observed? - Customers are increasingly approaching the company to deploy solutions across their entire organization rather than just for specific use cases [48][50] Question: What changed from a behavioral perspective among customers? - Customers are realizing the limitations of other solutions and are eager to adopt Palantir's offerings for tangible results [62][63]