(Bloomberg) — Palantir Technologies Inc. beat analysts’ first-quarter revenue estimates and raised its forecast for full-year revenue, citing demand from U.S. companies for its new artificial intelligence software.
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The company reported revenue of $634.3 million for the three months ended March 31, up 21% year over year. Analysts had estimated the company would post revenue of $615.8 million, according to data compiled by Bloomberg. Net income was $106 million, the largest quarterly profit ever, and far exceeded the average estimate of $83 million. Palantir reported its first profitable year in 2023.
Co-founded by Peter Thiel, Palantir develops software and analytics tools for companies and government agencies tied to American interests. Palantir’s software is used by defense forces to support Ukrainian and Israeli targets, as well as in military efforts by U.S. allies to counter China’s aggression in Taiwan – a stance that has angered some investors.
“We are pro-Ukraine and pro-Israel,” CEO Alex Karp said in an interview. “Not everyone wants to be on our train.”
Palantir’s roots lie in government sales – the U.S. Central Intelligence Agency’s venture arm was among its early backers – but “unbridled and growing demand” from U.S. companies is now driving the deal, Karp told shareholders in a letter.
Palantir sells its AI software through bootcamps, an engineer-led strategy to get customers up and running in days instead of months, and which the company blames for the number of U.S. commercial customers increasing in the first quarter 69% to 262.
Palantir reported $335 million in government revenue and $299 million in commercial revenue for the first three months of the year.
Analysts expect commercial revenues to dwarf government sales next year.
Due to unrealized business value and continued demand, Palantir slightly increased its annual revenue forecast to a range of $2.68 billion to $2.69 billion. Adjusted operating income guidance was raised to $868 million to $880 million. Analysts had expected $846.6 million.
For the current quarter, Palantir expects revenue of $649 million to $653 million and adjusted operating income of $209 million to $213 million.
Palantir is one of the frontrunners in the tech world’s current AI craze, with new products helping to increase its value by more than 200% in the last 12 months.
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