By Adam Levine

Software-maker Palantir exceeded high expectations for its first-quarter earnings results on Monday afternoon. Its shares were still down sharply in after-hours trading.

Adjusted earnings-per-share were in-line with Wall Street's consensus estimate of 13 cents, and up from eight cents last year. Revenue for the quarter reached $884 million, above expectations of $862 million, and up 39% on the year.

Palantir stock was down as much as 9% in after-hours trading following the release. Heading into the release, shares were up 65% this year.

Though it began as a vendor to intelligence and defense agencies, Palantir has expanded into commercial markets, and now gets roughly half of revenue from its corporate customers.

As has become common for Palantir, the first-quarter revenue beat was driven by U.S. sales, up 55% on the year, with U.S. commercial revenue up 71%.

The U.S. commercial business looks like it will continue to be strong. Palantir booked $810 million in new segment contracts, up 183% from last year. It has $2.3 billion left on existing U.S. commercial contracts.

Palantir is also becoming more profitable, with a 19.9% operating margin, versus 12.8% last year.

Palantir also had good news in its second-quarter and annual guidance. For the current quarter, it guided to $936 million in revenue, well ahead of analyst expectation of $899. It also raised 2025 guidance for revenue, adjusted operating income, and adjusted free cash flow.

Through the lens on price-to-sales ratio for the next twelve months, Palantir is the most richly valued company in the S&P 500, more-than-doubling up second place Texas Pacific Land. As such, earnings are always a high stakes affair.

Write to Adam Levine at adam.levine@barrons.com

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May 05, 2025 16:40 ET (20:40 GMT)

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