Palantir Technologies (PLTR) delivered a stronger-than-expected second-quarter report and lifted its guidance for the full year. The results sent PLTR more than 7% higher in Monday’s extended trading session.
The AI and data analytics company generated $1.94 billion in quarterly revenue, representing a 93% increase from the same period last year. Adjusted earnings came in at $0.41 per share, comfortably above the roughly $0.35 expected by Wall Street analysts.
Palantir’s Growth Accelerates Again
The company surpassed Wall Street’s revenue estimate of $1.81 billion, while also outperforming its own forecast of approximately $1.80 billion.
Palantir’s expansion gained further momentum during the quarter. Revenue had already risen 85% year over year in the first quarter, but growth accelerated to 93% in the latest reporting period.
The strongest contribution came from Palantir’s U.S. commercial division. Revenue from American business customers jumped 149% from a year earlier to $764 million.
Government-related revenue also remained strong, climbing 90% to $809 million. The increase came despite continued political scrutiny surrounding some of Palantir’s public-sector contracts.
The company’s rapid growth was accompanied by higher profitability. GAAP net income reached $1.06 billion, producing a net margin of about 55%. Adjusted operating margin rose to 62%.
Palantir’s Rule of 40 score reached 155%, reflecting the combination of its revenue growth and operating profitability. For comparison, software companies are generally viewed as performing strongly when this measure exceeds 40%.
Record Deal Activity Expands the Backlog
Palantir continued to attract larger customer commitments during the quarter. The company signed 220 agreements valued at $1 million or more.
Total contract value in the U.S. commercial business reached a record $2.13 billion, up 153% year over year.
Remaining deal value within the same division climbed to $6.24 billion, more than twice the figure reported a year ago. The growing backlog gives Palantir a clearer view of potential future sales as customers gradually expand and implement their contracts.
The increase also suggests that Palantir’s current growth is not being driven only by short-term demand. A larger contracted pipeline could support revenue beyond the latest quarter, provided customers proceed with planned deployments.
Strong Results Prompt Another Guidance Increase
Management raised its full-year revenue forecast to a range of $8.15 billion to $8.158 billion. The new outlook points to growth of roughly 82% and represents a sizable increase from the previous upper estimate of around $7.66 billion.
Palantir now expects adjusted operating income of approximately $4.89 billion. That figure is above the $4.51 billion analysts had projected before the report.
The company also increased its adjusted free cash flow guidance to between $4.5 billion and $4.7 billion.
Palantir linked the stronger outlook to rising demand for sovereign AI systems. These products allow companies and government organizations to use artificial intelligence while maintaining control over sensitive data, operational processes and internal decision-making.
Demand for this type of infrastructure has increased as customers look for alternatives to relying entirely on external AI platforms. Palantir’s existing relationships with governments and large enterprises place the company in a strong position to benefit from this shift.
PLTR Rallies but Remains Far From Its Peak
Palantir shares closed the regular session at $125.65, gaining 2.1% before the earnings announcement. The stock then advanced to approximately $135.12 in after-hours trading.
Options markets had anticipated a potentially sharp reaction, pricing in a move of around 11% in either direction following the report.
Even with the post-earnings rally, PLTR remains well below its yearly high of $207.52. Before the latest results, the stock had fallen about 31% since the start of the year as investors reassessed the elevated valuations attached to AI-focused companies.
The debate now centers on whether Palantir can maintain its exceptional growth rate while converting its expanding contract pipeline into reported revenue and cash flow.
For the third quarter, the company expects revenue of approximately $2.16 billion. Continued upside in the stock may depend on whether actual customer spending develops quickly enough to justify the market’s long-term expectations.
