Palantir Wows Retail Traders With Q1 Revenue Beat And Guidance Hike, But Stock Drops Amid Profit-Taking

Palantir Technologies, Inc. (PLTR) stock came under selling pressure in Monday's after-hours trading despite upbeat quarterly results and an upward adjustment to the full-year guidance.

The Denver, Colorado-based company reported adjusted earnings per share (EPS) of $0.13 and revenue of $883.86 million for the first quarter of the fiscal year 2025. This marked an increase from an EPS of $0.08 and $634.34 million a year earlier and the previous quarter's $0.14 and $828 million.

While the bottom-line result aligned with the consensus, revenue exceeded the average analysts' estimate of $862.13 million and the guidance of $858 million to $862 million.  

Quarterly revenue from the U.S. operations climbed 55% year over year (YoY) to $628 million, or roughly 71% of the total revenue. U.S. Commercial revenue rose 71% to $255 million, faster than the 45% growth in the U.S. government revenue. 

On the other hand, international commercial revenue fell 5% YoY and 11% sequentially to $141 million, reflecting continued headwinds in Europe and a one-time revenue catch-up in the year-ago quarter.

International government revenue rose 45% year over year and 2% sequentially to $114 million, thanks to an expanded scope in U.K. healthcare and defense and the company's new NATO partnership.

The adjusted operations income was $390.71 million, also ahead of the guidance.

Palantir said it closed 139 deals valued at at least $1 million, 51 deals valued at at least $5 million, and 31 deals valued at at least $10 million. The company also noted that it booked a U.S. commercial total contract value (TCV) of $810 million, up 138% YoY and marking a record quarterly number.

Customer count was up 39% year over year and 8% from the previous quarter, but it slowed from the previous quarter's 43% and 13%.

CEO Alex Karp said, "We are in the middle of a tectonic shift in the adoption of our software." He noted that the company's U.S. commercial revenue surpassed a billion-dollar-annual-run-rate for the first time during the first quarter.

Palantir ended the quarter with a cash position of $5.4 billion. 

The company raised its full-year revenue guidance to $3.89 billion to $3.902 billion from $3.741 billion to $3.757 billion. It also raised the U.S. commercial revenue guidance to more than $1.178 billion, marking a slower YoY growth.

Palantir raised the adjusted income from operations guidance to $1.6 billion to $1.8 billion, from $1.551 billion to $1.567 billion. 

In a letter to shareholders, Karp said, "This is a level of surging and ferocious growth that would be spectacular for a company a tenth of our size."

Commenting on the results, Wedbush analyst Daniel Ives said, "Any doubts about Palantir and the AI Revolution trajectory were answered with this monster US commercial performance in our view."

On Stocktwits, retail sentiment toward Palantir stock was 'extremely bullish' (84/100), and the message volume was 'extremely high.'

A bullish watcher shrugged off the post-market dip as a "normal pullback" after an 85% run-up in a month.

Another user noted that Palantir grew revenue and raised guidance while also posting the highest rule of 40 in market history, even as other companies reported revenue declines and/or cut revenue. They recommended buying the stock.

The rule of 40 is a gauge of the health of software-as-a-service companies, which proposes that the combined value of revenue growth and profit margin should be 40% or higher.

Palantir stock ended Tuesday's session down 0.41% at $123.77 and fell 9.25% in the after-hours session.

The stock has gained nearly 64% so far this year.

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