Palantir's third-quarter forecast surpassed expectations, hinting at an increase in revenue growth. The data-analytics company raised its outlook for adjusted income from operations for the year. Additionally, Palantir reported a contract from the U.S. Special Operations Command during the quarter.
On Monday, Palantir reported a 13% increase in second-quarter revenue and delivered a forecast for the current period that was higher than what analysts had projected. This sent shares up by as much as 3% in after-hours trading. Their earnings per share (EPS) of 5 cents met Wall Street's expectations, while revenue of $533 million was slightly above the estimates. Moreover, the data-analytics company recorded a net income of $28 million, which represented a substantial improvement compared to the net loss of $179 million it posted during the same period a year prior.
Palantir's guidance for the third quarter predicts revenue of between $553 million and $557 million, which implies 16% growth that outstrips previous predictions. Additionally, management reaffirmed expectations of net income in the third and fourth quarters last quarter, setting a goal of over $2.212 billion in revenue for the full year, surpassing the midpoint of its early forecast. CEO Alex Karp mentioned in a shareholder letter that the company is likely to be accepted into the S&P 500 after providing its financial results in November. Furthermore, it also raised its adjusted income from operations for the year to over $576 million.
It was the government sector that contributed the most to Palantir's revenue, accounting for 57% of sales. This was partially due to the company signing a $463 million contract with the U.S. Special Operations Command. In addition, international government revenue rose 31% to $76 million, although the overall performance in the segment was still unsatisfactory, as noted by Ryan Taylor, Palantir's chief legal and revenue officer.
Alex Karp spoke positively of the potential for commercializing AI, claiming it could exceedingly boost America's GDP. He furthermore added that his company will strive to monetize its Artificial Intelligence Platform, rather than just let it create poetry, as some organizations have done.
With year-to-date gains of 177%, Palantir's stock has outperformed the S&P 500's 17% rise.
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