Palantir (PLTR) 2 Nov 232023 Q3 Earnings call transcript

Good morning. I'm Ana Soro from Palantir's finance team, and I'd like to welcome you to our third quarter 2023 earnings call. We'll be discussing the results announced in our press release issued before the market opened and posted on our Investor Relations website.

During the call, we will make statements regarding our business that may be considered forward looking within applicable securities laws including statements regarding our fourth quarter and fiscal 2023 results, management's expectations for our future financial and operational performance and other statements regarding our plans, prospects and expectations. promises which and differ could actual not risks subject materially are results. uncertainties, and cause statements or are guarantees to from These them to distributed in those our in earnings is concerning filings. market available Information press today, risks SEC release before and the opened our law. no undertake by update except as forward-looking We statements, to required obligation

a in Further, during financial call, in These from financial non-GAAP today's to, measures. be addition refer considered or will the we course substitute not measures. GAAP as measures isolation of adjusted to for, should certain

information to about investor included press these of Additional non-GAAP measures, and comparable in reconciliation including release presentation non-GAAP is provided today. GAAP measures, our

Our Investor press at investors.palantir.com. SEC filings investor and Relations are available website presentation on our release,

various year-over-year when rates the business. These unless our comparisons growth rates Over the refer of course reflect discussing stated. call, otherwise we to will

and me Executive today's Chief Glazer, Financial Chief call. Officer; Joining and Officer; to now start to Officer; the Ryan Shyam Officer Legal are Karp, Taylor, David call Chief Technology turn it Chief Chief on Ryan over Officer. I'll Alex Sankar, Revenue

XX deals In achieved we $X to to deals XX million strong company quarter, XX and company. $XX that across across our industries, and for of $X of drive XX more of profitability or across are pleased XX or our fourth We we the XX report industries. continue closed across million deals GAAP results consecutive QX, more industries, or more million

business commercial quarter, Our U.S. XX% accelerated last growing year-over-year.

XXXX. XX% our quarter-over-quarter growth that Excluding us started customers year-over-year XX% of contracts, X/X is strategic and commercial it in sequentially, grew from and with

expect of ago. business in count was and of what including of million, is conversion with was is of within up of U.S. $XX just our is multiyear with a QX. in year the commercial in for way deal the to transformation value X XX% our and continued shorter we start converted growth all deals and deliver U.S. in Our X partner tenfold remarkable. to largest home up part customers, impact AIP's now quarter-over-quarter commercial seeing U.S. is and construction the We're pilot basis. due to rose also $XXX and companies what This dollar-weighted to for excess the the a expansion TCV to and and count and X.Xx is on we customers, last year-over-year both The expansion, duration QX AIP AIP's larger it U.S. XX% acceleration and our commercial intensify. at it having Deal rapid continue operations at short on new of it nothing closed years times impact their of customer million existing

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We line the focus are basis. guidance our on growth line GAAP that score intense Revenue first quarter our We Shyam. top reaccelerated unit business, and delivering the driven an transforming trailing AIP, basis a we demonstrating profitability, our Rule while of both XXX on while range of to XX% U.S. back beat profitable commercial Thanks, to XX high ever fourth XX-month points increased and expand, our our consecutive end on the simultaneously exceptional of had continue time quarter-over-quarter economics on business. GAAP our bottom by of quarter. the margins of

delivered in quarters. also flow third adjusted operating over over free the consecutive quarter billion and $X.X We X cash of profit last GAAP our

Turning line global to top our results.

the to high XX% million, the revenue up guidance. reaccelerated sequentially, range prior end $XXX exceeding year-over-year and quarter of Third of our X%

strategic customer and per we Excluding XX-month customers as of new focused largest customers count commercial customers from top year-over-year Trailing quarter continues XX% revenue XXX grew Revenue impact grew third landing million sequentially customer. accounts. to from revenue XX our the to per and X% sequentially. X% increased from XX% expand. on year-over-year contracts, our Customer remain year-over-year $XX to revenue XX%

moving our to Now segment. commercial

to sequentially $X a to X% billion It's entire and for year-over-year reaching million. quite achievement. congratulate an milestone this I'd quarter. XX% like run commercial org grew rate $XXX revenue commercial quarter annualized Third the

XX% year-over-year sequentially. Excluding the impact grew XX% from commercial strategic commercial revenue and contracts,

XX% the to million, quarter, revenue and commercial U.S. up year-over-year In third reaccelerated XX% sequentially. $XXX

U.S. grew from strategic commercial XX% and commercial contracts, XX% year-over-year revenue Excluding sequentially. revenue

duration new existing U.S. impact of at through see on of growth on focus adoption commercial customers. our booked to of representing of business, of the continue the dollar-weighted AIP We our expansion commercial both year-over-year We a and basis. TCV, intense XX% $XXX the customers on million opportunities

XX% tenfold reflecting customer in increase X Our commercial benefiting went customer to XXX of U.S. our a customers, go-to-market the when ago. grew This we year-over-year count AIP represents increase in growth count from from motion. and commercial just U.S. XX% sequentially, years public velocity

quarterly was million revenue. year-over-year conditions the million revenue up Europe. anticipate customers on to $XX strategic million expected remain in growth of international business capitalize beyond, of while quarter prior X% down representing and opportunities was Our XX% from targeted the continued continue $XX we fourth or from commercial Asia, X.X% from commercial million to $XX million, in quarter fourth contracts challenging quarter. and between We to to decline Revenue $XXX sequentially to Continental $XX revenue, these in to Middle as X.X% East

Shifting to Government our segment.

X% year-over-year XX% grew to year-over-year X% government million. sequentially million. and and quarter XX% government Third to $XXX $XXX U.S. grew revenue sequentially revenue

historically our predict PG, continued government needed our AIP and geopolitical exactly in International the current million, so as to to work high MetaConstellation when across at more and sequentially CAGRs, year-over-year our and in X% hard it's in revenue GAIA, are the grew world $XX by revenue defense. and Shyam bolstered landscape. healthcare even reconverge mentioned, XX% will While battlefields products, government

acceleration by the include million, Moving in does therefore, XX% business. XXX%, commercial revenue business the Europe. customers was booked not Net retention new primarily sequentially. retention is, dollar of past in commercial Net from dollar reflective up U.S. and was to our months from bookings. that $XXX Continental acquired our XX we not recent impacted in TCV headwinds

quarter third total in $XXX in million performance deal billion the We remaining obligations. $X.X and with value ended remaining

in RPO and clauses, than which contractual reminder, an comprised less beyond convenience does with is of that business. it a our business termination as XX government both our primarily obligations As take common of account into term of commercial for contracts fall are not of months most initial

the and deal go-to-market growth XX% our contracts remaining Our strategic motion. of U.S. total commercial acceleration sequentially from business commercial value excluding highlighting impact saw when year-over-year XX% the of

quarter. operating to high and margin expense. margins. Adjusted ahead expense, was stock-based of end fourth $XXX stock-based expense was gross income operations, and guidance, the basis XX%, and our compensation representing employer million, payroll from adjusted Adjusted of the related taxes for Turning which margin, an adjusted the XXX excludes which excludes operating compensation of of consecutive points marking expanding margin quarter XX% prior

short, X efficiency X% products, our expense consecutive and was QX adjusted sequentially revenue. down This able significantly in been operating software $XXX at to million, investing the quarters home for flatline In including flat while leverage of expenses year-over-year. we've and our reaccelerating scale. our AIP drives and

in was talent. and X% and demonstrating continuously sequentially, drive innovation XX% product adjusted R&D expense commitment our forward year-over-year invest technical up to

our Over to GAAP dedication the past profitability year, unwavering sustain we income. operating emphasized GAAP and have

us improving of in quarters operating to consecutive income X invest more enable Our AIP. GAAP aggressively

specific growth resourcing and below around in geographies and Looking investment ahead AIP to calibrating expense increase even world. as we quarter and fourth remain the on revenue beyond, to focused we growth, the

third quarter, quarter operating GAAP of income. operating GAAP third generated our of the $XX million, income consecutive we In

net XX% $XX time We GAAP operating income income trailing a margin, of basis. ever both fourth consecutive profitability achieved XX-month a GAAP the profitability. of also This and on quarter net representing we've GAAP million, first our GAAP is generated

to continue we as up in expect manage compensation we trend our in QX as previous AIP. to invest we expense, While quarters, stock-based it mentioned continue I to in

earnings earnings per quarter share $X.XX was per Third share and adjusted was GAAP $X.XX.

XXX-basis-point quarter. Additionally, Rule to and margin XX operating of to growth a our XX%, score prior revenue from combined the accelerated adjusted an increase

and this maintain performance. top balance line will exceptional We bottom strive to of

$XXX $XXX flow, in margin million adjusted of XX%. In free representing cash cash operations, the of Turning representing a margin quarter, and we to in flow. third XX%, from million a generated our cash

first X cash QX generated U.S. quarters, billion with free in flow, trailing the on treasury short-term $XXX $X.X flow Over million time cash operations past million and we've $X.X cash the adjusted we've bills. cash, in We ended cash billion basis. in from free a exceeded adjusted in $XXX flow XX-month equivalents and marking

of access undrawn. our million to liquidity up entirely retain to which facility, We through remains additional credit $XXX revolving

outlook. Now turning our to

of $XXX $XXX between adjusted $XXX we revenue income million XXXX, and between income. $XXX million net QX million operations from in of expect and GAAP For million,

are to For and our guidance raising billion. full between year XXXX, $X.XXX revenue $X.XX we billion

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I'll turn that, for With over Alex it remarks. to a few

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with we begin questions that, before With few from we'll up the open our a shareholders call.

other from future question Our partners allied of specifically, in is or the supporting around has in allied current are plans Israel current Christopher. situation Palantir first The our the opened countries there Asia products? with globe, eyes

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before today's Alex, end call? Thank all. say is we you there you'd like to anything

almost waiting in Palantirian we internally. an who and or as culture, is if their We are we a or investor an wants participate don't increasingly fighters, mission-driven it's it mission saying everybody an culture, wild you're a attendees are a like fact, believers, But we usual, follows everyone is to mission-driven -- someone sophist. and or who and welcome as because just investor to be then us. I a you're drop As and get we are ride that which this if term there's employee

for Thank call. Q&A you. concludes That today's