Palantir beats Q3 forecasts as US commercial revenue overtakes government for first time

Shares of Palantir Technologies Inc. rose more than 1% in late trading today after the big-data analytics company beat third-quarter expectations and raised its full-year revenue guidance for the third time this year.

For the quarter that ended on Sept. 30, Palantir reported adjusted earnings per share of 44 cents, up from 21 cents in the same quarter of last year, on revenue of $2.313 billion, up 96% year-over-year. Analysts were expecting earnings of 41 cents per share on revenue of $2.18 billion. It was the first quarter in which Palantir’s revenue topped $2 billion.

U.S. commercial revenue overtook U.S. government revenue for the first time in Palantir’s history. Sales to commercial customers in the U.S. reached $984 million, up 148% from a year earlier and 29% from the second quarter. Government sales rose 96%, to $953 million. Together they took total U.S. revenue to $1.937 billion, up 119% year-over-year.

Palantir closed 212 deals worth at least $1 million in the quarter, including 64 worth $10 million or more. Total contract value rose 6% from a year earlier, to $2.918 billion, after growing 151% in the same period of 2025. U.S. commercial remaining deal value climbed 79%, to $6.517 billion.

Net income more than doubled, to $1.128 billion from $476 million a year earlier, giving the company a 49% net margin. On an adjusted basis, operating income came to $1.427 billion at a 62% margin, and adjusted free cash flow was $1.216 billion. Palantir’s “Rule of 40” score hit 158%. The company ended September holding $10.4 billion in cash, cash equivalents and U.S. Treasury securities.

Co-founder and Chief Executive Alex Karp used the earnings release to argue that what he called the “Sovereign AI movement” is creating “the most dramatic dichotomy between haves and have nots” he has seen in 30 years in business. Governments and companies alike are being forced into one group or the other, “voluntarily or not,” according to Karp. That shift, he said, is “purpose-built for Palantir.”

Looking to the fourth quarter, Palantir expects revenue of $2.649 billion to $2.653 billion and adjusted operating income of $1.640 billion to $1.644 billion. Analysts had forecast fourth-quarter revenue of $2.46 billion.

Full-year revenue guidance now stands at $8.530 billion to $8.534 billion, up from the $8.150 billion to $8.158 billion Palantir forecast in August. U.S. commercial revenue is expected to exceed $3.559 billion, growth of at least 143%, and the company lifted its adjusted operating income outlook to a range of $5.245 billion to $5.249 billion. Adjusted free cash flow for 2026 is now forecast at $4.8 billion to $5 billion.

Image: Palantir

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