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Palantir Reports Revenue Growth of 26% Y/Y for Q2 2022, US Commercial Revenue Up 120% Y/Y in Q2 2022

·17-min read

DENVER, August 08, 2022--(BUSINESS WIRE)--Palantir Technologies Inc. (NYSE:PLTR) today announced financial results for the second quarter ended June 30, 2022.

Q2 2022 Highlights

  • Revenue grew 26% year-over-year to $473 million

  • US revenue grew 45% year-over-year to $290 million

  • Commercial revenue grew 46% year-over-year

    • US commercial revenue grew 120% year-over-year

  • US government revenue grew 27% year-over-year

  • US commercial customer count increased 250% year-over-year, from 34 customers in Q2 2021 to 119 customers in Q2 2022

  • Total contract value ("TCV") closed of $792 million, including US TCV closed of $588 million

  • Loss from operations of $(42) million, representing a margin of (9)%, up 3,000 basis points year-over-year

  • Adjusted income from operations of $108 million, representing a margin of 23%

  • Cash from operations of $62 million, representing a 13% margin

  • Adjusted free cash flow of $61 million, representing a 13% margin

Q2 2022 TTM Highlights

  • US revenue of $1.04 billion on a trailing-twelve-months ("TTM") basis

  • Cash from operations of $292 million, representing a 17% margin

  • Adjusted free cash flow of $314 million, representing an 18% margin

Q2 2022 Financial Summary

(Amounts in thousands, except percentages and per share amounts)

Second Quarter

Amount

Revenue

$

473,010

Year-over-year growth

26

%

Amount

Margin

Loss from Operations

$

(41,745

)

(9

)%

Adjusted Income from Operations

$

107,849

23

%

Cash from Operations

$

62,431

13

%

Adjusted Free Cash Flow

$

60,906

13

%

Net Loss

$

(179,329

)

Adjusted Net Income

$

(21,120

)

Adjusted EBITDA

$

112,744

24

%

GAAP Net Loss Per Share, Diluted

$

(0.09

)

Adjusted Loss Per Share, Diluted

$

(0.01

)

Outlook

For Q3 2022, we expect revenue of between $474 - $475 million and adjusted income from operations of $54 - $55 million.

For full year 2022, we now expect revenue of between $1.9 - $1.902 billion and adjusted income from operations of $341 - $343 million. This revised guidance excludes any new major U.S. government awards and we believe this to be the base case.

Earnings Webcast

A live public webcast will be held at 6:00 a.m. MT / 8:00 a.m. ET today to discuss the results for our second quarter ended June 30, 2022 and financial outlook. The webcast can be accessed by registering online at https://palantir.events/palantir-2022-q2. A replay of the webcast will be available at https://investors.palantir.com following the event.

An investor presentation, including supplemental financial information and reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, will be available through Palantir’s Investor Relations website at https://investors.palantir.com, as well as a letter from our Chief Executive Officer, which will be available through Palantir’s website at https://www.palantir.com.

Forward-Looking Statements

This press release and statements on our earnings webcast contain "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding our financial outlook, product development, distribution, and pricing, expected benefits of and applications for our software platforms, business strategy, and plans (including strategy and plans relating to our sales and marketing efforts, sales force, partnerships, and customers), investments in our business, market trends and market size, opportunities (including growth opportunities), our expectations regarding our recent and potential investments in, and commercial contracts with, various entities, including special purpose acquisition companies and other privately-held or publicly-traded companies, our expectations regarding macroeconomic events, and positioning. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management. Words such as "guidance," "expect," "anticipate," "should," "believe," "hope," "target," "project," "plan," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," "shall," and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to risks detailed in our filings with the Securities and Exchange Commission (the "SEC"), including in our annual report on Form 10-K for the fiscal year ended December 31, 2021 and other filings and reports that we may file from time to time with the SEC, including our quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2022. In particular, the following factors, among others, could cause our results to differ materially from those expressed or implied by such forward-looking statements: our ability to successfully execute our business and growth strategy; the sufficiency of our cash and cash equivalents to meet our liquidity needs; the demand for our platforms in general; our ability to increase our number of new customers and revenue generated from customers; our ability to realize some or all of the total contract value of customer contracts as revenue, including any contractual options available to customers or contractual periods that are subject to termination for convenience provisions; our long and unpredictable sales cycle; our ability to successfully grow our direct sales force and to successfully execute our channel sales and other strategic initiatives with third parties; our ability to retain and expand our customer base; the fluctuation of our results of operations and our key business measures on a quarterly basis in future periods; the seasonality of our business; the implementation process for our platforms, which may be complex and lengthy; our ability to successfully develop and deploy new technologies to address the needs of our existing or prospective customers; our ability to make our platforms easier to install and consume; our ability to maintain and enhance our brand and reputation; our ability to maintain and enhance our culture as our business grows; news or social media coverage about us, including but not limited to coverage that presents, or relies on, inaccurate, misleading, incomplete, or otherwise damaging information; the impact of recent or future global macroeconomic and geopolitical events, such as Russia’s invasion of Ukraine, foreign currency fluctuations, or rising inflation or interest rates in the U.S. and in other countries, on the business and operations of our company or of our existing or prospective customers and partners; and any breach or access to customer or third-party data.

The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. Past performance is not necessarily indicative of future results.

Additional Definitions

For the purpose of this press release and our earnings webcast, the value of deals closed and TCV closed each reflect the total contract value of contracts that have been entered into with, or awarded by, our government and commercial customers. Annual contract value ("ACV") closed is defined as the total value of contracts closed in the period divided by the dollar-weighted average contract duration of those same contracts.

The value of deals closed, TCV closed, and ACV closed include existing contractual obligations and presume the exercise of all contract options available to our customers and no termination of contracts; however, the majority of our contracts are subject to termination provisions, including for convenience, and there can be no guarantee that contracts are not terminated or that contract options will be exercised.

Non-GAAP Financial Measures

This press release and the accompanying tables contain the non-GAAP financial measures adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes; adjusted operating margin; adjusted free cash flow; adjusted free cash flow margin; adjusted earnings before interest, taxes, depreciation, and amortization ("adjusted EBITDA"); adjusted EBITDA margin; adjusted net income; and adjusted earnings (loss) per share ("EPS"), diluted.

We believe these non-GAAP financial measures and other metrics described in this press release help us evaluate our business, identify trends affecting Palantir’s business, formulate business plans and financial projections, and make strategic decisions. We exclude stock-based compensation, which is a non-cash expense, from these non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance and provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team. We exclude employer payroll taxes related to stock-based compensation as it is difficult to predict and outside of Palantir’s control. Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Further, these metrics have certain limitations as they do not include the impact of certain expenses that are reflected in our consolidated statements of operations. For example, adjusted free cash flow does not reflect our future contractual commitments or the total increase or decrease in our cash balances for a given period. Thus, our non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.

We compensate for these limitations by providing a reconciliation of each of these non-GAAP measures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure.

A reconciliation table of the most comparable GAAP financial measure to each non-GAAP financial measure used in this press release is included at the end of this release. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, reconciling items that may be incurred in the future, such as stock-based compensation and related employer payroll taxes, the effect of which may be significant.

Available Information

Palantir uses its Investor Relations website at https://investors.palantir.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Palantir’s Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, and webcasts.

About Palantir Technologies Inc.

Foundational software of tomorrow. Delivered today. Additional information is available at https://www.palantir.com.

Palantir Technologies Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Revenue

$

473,010

$

375,642

$

919,367

$

716,876

Cost of revenue (1)

102,224

90,926

196,627

165,037

Gross profit

370,786

284,716

722,740

551,839

Operating expenses:

Sales and marketing (1)

168,875

162,379

329,360

298,476

Research and development (1)

88,171

110,524

176,772

208,995

General and administrative (1)

155,485

157,961

297,792

304,530

Total operating expenses

412,531

430,864

803,924

812,001

Loss from operations

(41,745

)

(146,148

)

(81,184

)

(260,162

)

Interest income

1,472

372

2,019

748

Interest expense

(670

)

(590

)

(1,264

)

(2,430

)

Other income (expense), net

(135,798

)

2,125

(195,668

)

(2,769

)

Loss before provision for (benefit from) income taxes

(176,741

)

(144,241

)

(276,097

)

(264,613

)

Provision for (benefit from) income taxes

2,588

(5,661

)

4,611

(2,559

)

Net loss

$

(179,329

)

$

(138,580

)

$

(280,708

)

$

(262,054

)

Net loss per share attributable to common stockholders, basic

$

(0.09

)

$

(0.07

)

$

(0.14

)

$

(0.14

)

Net loss per share attributable to common stockholders, diluted

$

(0.09

)

$

(0.07

)

$

(0.14

)

$

(0.14

)

Weighted-average shares of common stock outstanding used in computing net loss per share attributable to common stockholders, basic

2,054,799

1,894,606

2,045,604

1,858,085

Weighted-average shares of common stock outstanding used in computing net loss per share attributable to common stockholders, diluted

2,054,799

1,894,606

2,045,604

1,858,085

—————

(1) Includes stock-based compensation expense as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Cost of revenue

$

11,211

$

24,029

$

22,888

$

40,006

Sales and marketing

49,405

72,008

98,677

129,294

Research and development

24,978

50,630

51,883

88,504

General and administrative

60,175

86,075

121,644

168,669

Total stock-based compensation

$

145,769

$

232,742

$

295,092

$

426,473

Palantir Technologies Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

As of June 30,

As of December 31,

2022

2021

Assets

Current assets:

Cash and cash equivalents

$

2,358,393

$

2,290,674

Restricted cash

28,125

36,628

Accounts receivable, net

265,826

190,923

Marketable securities

99,210

234,153

Prepaid expenses and other current assets

150,885

110,872

Total current assets

2,902,439

2,863,250

Property and equipment, net

47,644

31,304

Restricted cash, noncurrent

28,647

39,612

Operating lease right-of-use assets

211,410

216,898

Other assets

92,198

96,386

Total assets

$

3,282,338

$

3,247,450

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

56,798

$

74,907

Accrued liabilities

187,568

155,806

Deferred revenue

219,441

227,816

Customer deposits

161,026

161,605

Operating lease liabilities

40,909

39,927

Total current liabilities

665,742

660,061

Deferred revenue, noncurrent

34,143

40,217

Customer deposits, noncurrent

15,412

33,699

Operating lease liabilities, noncurrent

216,059

220,146

Other noncurrent liabilities

2,158

2,297

Total liabilities

933,514

956,420

Stockholders’ equity:

Common stock

2,063

2,027

Additional paid-in capital

8,119,876

7,777,085

Accumulated other comprehensive loss

(6,674

)

(2,349

)

Accumulated deficit

(5,766,441

)

(5,485,733

)

Total stockholders’ equity

2,348,824

2,291,030

Total liabilities and stockholders’ equity

$

3,282,338

$

3,247,450

Palantir Technologies Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Six Months Ended June 30,

2022

2021

Operating activities

Net loss

$

(280,708

)

$

(262,054

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

9,207

7,999

Stock-based compensation

295,092

426,473

Deferred income taxes

(14

)

(2,162

)

Non-cash operating lease expense

20,246

14,435

Unrealized and realized (gain) loss from marketable securities, net

201,341

Other operating activities

(3,678

)

560

Changes in operating assets and liabilities:

Accounts receivable

(75,739

)

(83,883

)

Prepaid expenses and other current assets

(36,351

)

12,770

Other assets

8,087

(7,360

)

Accounts payable

(19,985

)

14,589

Accrued liabilities

28,850

9,070

Deferred revenue, current and noncurrent

(11,681

)

(3,679

)

Customer deposits, current and noncurrent

(19,314

)

28,668

Operating lease liabilities, current and noncurrent

(17,331

)

(15,795

)

Other noncurrent liabilities

(114

)

Net cash provided by operating activities

97,908

139,631

Investing activities

Purchases of property and equipment

(20,673

)

(1,405

)

Purchases of marketable securities

(89,500

)

Proceeds from sales of marketable securities

19,009

Net cash used in investing activities

(91,164

)

(1,405

)

Financing activities

Principal payments on borrowings

(200,000

)

Proceeds from the exercise of common stock options

47,541

376,688

Other financing activities

307

(1,744

)

Net cash provided by financing activities

47,848

174,944

Effect of foreign exchange on cash, cash equivalents, and restricted cash

(6,341

)

(1,496

)

Net increase in cash, cash equivalents, and restricted cash

48,251

311,674

Cash, cash equivalents, and restricted cash - beginning of period

2,366,914

2,128,146

Cash, cash equivalents, and restricted cash - end of period

$

2,415,165

$

2,439,820

Palantir Technologies Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(unaudited)

Non-GAAP Reconciliations

Adjusted Income from Operations and Adjusted Operating Margin (in thousands, except percentages)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Loss from operations

$

(41,745

)

$

(146,148

)

$

(81,184

)

$

(260,162

)

Add: stock-based compensation

145,769

232,742

295,092

426,473

Add: employer payroll taxes related to stock-based compensation

3,825

30,133

11,331

66,999

Adjusted income from operations

$

107,849

$

116,727

$

225,239

$

233,310

Adjusted operating margin

23

%

31

%

24

%

33

%

Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin (in thousands, except percentages)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Net cash provided by operating activities

$

62,431

$

22,750

$

97,908

$

139,631

Add: cash paid for employer payroll taxes related to stock-based compensation

3,933

27,770

13,457

62,572

Less: purchases of property and equipment

(5,458

)

(697

)

(20,673

)

(1,405

)

Adjusted free cash flow

$

60,906

$

49,823

$

90,692

$

200,798

Adjusted free cash flow margin

13

%

13

%

10

%

28

%

Adjusted EBITDA (in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Net loss

$

(179,329

)

$

(138,580

)

$

(280,708

)

$

(262,054

)

Less: interest income

(1,472

)

(372

)

(2,019

)

(748

)

Add: interest expense

670

590

1,264

2,430

Add: other (income) expense, net

135,798

(2,125

)

195,668

2,769

Add: provision for (benefit from) income taxes

2,588

(5,661

)

4,611

(2,559

)

Add: depreciation and amortization

4,895

4,762

9,207

7,999

Add: stock-based compensation

145,769

232,742

295,092

426,473

Add: employer payroll taxes related to stock-based compensation

3,825

30,133

11,331

66,999

Adjusted EBITDA

$

112,744

$

121,489

$

234,446

$

241,309

Adjusted Earnings (Loss) Per Share, Diluted (in thousands, except per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Net loss

$

(179,329

)

$

(138,580

)

$

(280,708

)

$

(262,054

)

Add: stock-based compensation

145,769

232,742

295,092

426,473

Add: employer payroll taxes related to stock-based compensation

3,825

30,133

11,331

66,999

Add (less): income tax effect and adjustments (1)

8,615

(26,340

)

(2,122

)

(50,812

)

Adjusted net income (loss) attributable to common stockholders, diluted

$

(21,120

)

$

97,955

$

23,593

$

180,606

Weighted-average shares used in computing GAAP net loss per share, diluted

2,054,799

1,894,606

2,045,604

1,858,085

Adjusted weighted-average shares used in computing adjusted earnings (loss) per share, diluted (2)

2,054,799

2,310,731

2,170,385

2,323,271

Adjusted earnings (loss) per share, diluted

$

(0.01

)

$

0.04

$

0.01

$

0.08

————

(1)

Income tax effect is based on long-term estimated annual effective tax rates of 22.2% for the periods ended 2022 and 2021.

(2)

There were no additional dilutive securities included for the three months ended June 30, 2022 and an additional 125 million dilutive securities for the six months ended June 30, 2022 that were excluded from a GAAP perspective due to the Company’s net loss position. There was an additional 416 million and 465 million dilutive securities for the three and six months ended June 30, 2021, respectively, that were excluded from a GAAP perspective due to the Company’s net loss position.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220805005435/en/

Contacts

Investor Relations
investors@palantir.com

Media
media@palantir.com