Palantir Technologies Reports Strong Q1-2025 Earnings Amid Stock Decline

Palantir Technologies (NASDAQ: PLTR) saw its stock fall 9.3% in after-hours trading on Monday after the company released its earnings report for the first quarter of 2025. The decline likely stemmed from the company merely meeting Wall Street’s consensus earnings expectations. Despite impressive earnings growth, simply matching analysts’ forecasts can lead to a post-earnings stock drop, especially for a company with a high valuation, such as Palantir.

Prior to the earnings release, Palantir stock was valued at 238 times expected earnings for the upcoming year. In comparison, shares of Nvidia and Broadcom, leading AI chipmakers, were trading at 26 and 31 times forward projected earnings, respectively.

Despite the stock decline, the earnings report revealed significant growth metrics. Palantir’s revenue exceeded Wall Street expectations, with second-quarter guidance exceeding analyst forecasts. The company also raised its full-year 2025 guidance across multiple metrics.

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Image source: Getty Images.

Key Financial Metrics for Palantir Technologies

Metric	Q1 2024	Q1 2025	Change*
Revenue	$634 million	$884 million	39%
GAAP operating income	$81 million	$176 million	117%
Adjusted operating income	$226 million	$391 million	73%
GAAP net income	$106 million	$214 million	102%
Adjusted net income	$197 million	$334 million	70%
GAAP earnings per share (EPS)	$0.04	$0.08	100%
Adjusted EPS	$0.08	$0.13	63%

Data source: Palantir Technologies. GAAP = generally accepted accounting principles. Calculations by author except for revenue growth, which was provided by Palantir.

Investors may find the adjusted numbers more relevant, as they exclude one-time items. Wall Street expected an adjusted EPS of $0.13 on revenue of $862.1 million. Palantir met the profit expectation and surpassed revenue forecasts, exceeding its own guidance for revenue between $858 million to $862 million. The company does not typically issue earnings guidance.

During the quarter, Palantir generated cash flow of $310 million from operations, a 139% increase from the previous year. The adjusted free cash flow was $370 million, up 149% year over year. By the end of the quarter, Palantir held $5.4 billion in cash, cash equivalents, and short-term investments, an increase from $5.2 billion in the previous quarter, and reported no long-term debt.

Quarterly Performance Highlights

All percentage growth figures are year over year.

• Commercial revenue rose 33% to $397 million, making up 45% of total revenue.
• Government revenue increased 45% to $487 million, representing 55% of total revenue.
• U.S. revenue climbed 55% to $628 million, accounting for 71% of total revenue, with non-U.S. revenue at 29%.
• Total customer count grew by 39%.
• The company closed 139 deals over $1 million, including 51 deals of at least $5 million and 31 deals above $10 million.
• U.S. commercial revenue jumped 71% to $255 million.
• The number of U.S. commercial customers surged 65%.
• Total contract value (TCV) for U.S. commercial deals soared 183% to $810 million.
• The remaining deal value in U.S. commercial jumped 127% to $2.32 billion.
• U.S. government revenue increased 45% to $373 million, expanding from its initial base in defense and intelligence agencies to other sectors.

Guidance for Q2 2025 and Full-Year 2025

For Q2 guidance:

• Revenue is projected between $934 million and $938 million, indicating growth of around 38% year over year.
• Adjusted operating income is forecasted at $401 million to $405 million, suggesting growth of 58% to 60% year over year.

Before the release, Wall Street had estimated Q2 revenue at $899 million, or 33% growth, making Palantir’s guidance a significant beat.

For the full year guidance:

Metric	Prior 2025 Guidance	Current 2025 Guidance	Wall Street Estimate	Change Implied by Guidance* YOY
Total revenue	$3.741 billion to $3.757 billion	$3.890 billion to $3.902 billion	$3.75 billion	36% (up from 31%)
U.S. commercial revenue	Greater than $1.079 billion	Greater than $1.178 billion	N/A	At least 68% (up from at least 54%)
Adjusted operating income	$1.551 billion to $1.567 billion	$1.711 billion to $1.723 billion	N/A	52% to 53% (up from 38% to 39%)
Adjusted free cash flow	$1.5 billion to $1.7 billion	$1.6 billion to $1.8 billion	N/A	28% to 44% (up from 20% to 36%)
GAAP operating income and net income	Both positive in each quarter	Same as prior guidance	N/A	—

Data source: Palantir Technologies. YOY = year over year. *Calculations by author except for total figures.