Palantir Reports Revenue Growth of 31% for Q1 2022, US Commercial Revenue up 136% Y/Y in Q1 2022

Palantir Technologies Inc. PLTR today announced financial results for the first quarter ended March 31, 2022.

Q1 2022 Highlights

  • Total revenue grew 31% year-over-year to $446 million
  • Commercial revenue grew 54% year-over-year
    • US commercial revenue grew 136% year-over-year
  • Government revenue grew 16% year-over-year
  • Customer count grew 86% year-over-year
  • Loss from operations of $(39) million, representing a margin of (9)%, up 2,400 basis points year-over-year and 500 basis points sequentially
  • Adjusted income from operations of $117 million, representing a margin of 26%
  • Cash from operations of $35 million, representing an 8% margin
  • Adjusted free cash flow of $30 million, representing a 7% margin
  • GAAP net loss per share, diluted of $(0.05)
  • Adjusted earnings per share, diluted of $0.02

Q1 2022 Financial Summary

(Amounts in thousands, except percentages and per share amounts)

First Quarter

Amount

Revenue

$

446,357

 

 

Year-over-year growth

 

31

%

 

 

 

 

 

Amount

Margin

Loss from Operations

$

(39,439

)

(9

)%

Adjusted Income from Operations

$

117,390

 

26

%

Cash Flow from Operations

$

35,477

 

8

%

Adjusted Free Cash Flow

$

29,786

 

7

%

Net Loss

$

(101,379

)

 

Adjusted Net Income

$

44,713

 

 

Adjusted EBITDA

$

121,702

 

27

%

GAAP Net Loss Per Share, Diluted

$

(0.05

)

 

Adjusted Earnings Per Share, Diluted

$

0.02

 

 

 

Outlook

For Q2 2022:

  • We are guiding to a base case of $470 million in revenue. There is a wide range of potential upside to our guidance, including those driven by our role in responding to developing geopolitical events.
  • We expect adjusted operating margin of 20%.

For full year 2022, we continue to expect:

  • Adjusted operating margin of 27%.

Per long-term guidance policy, as provided by our Chief Executive Officer, Alex Karp, we continue to expect:

  • Annual revenue growth of 30% or greater through 2025. 

Earnings Webcast

A live public webcast will be held at 6:00 a.m. MT / 8:00 a.m. ET today to discuss the results for our first quarter ended March 31, 2022 and financial outlook. The webcast can be accessed by registering online at https://palantir.events/palantir-2022-q1. A replay of the webcast will be available at https://investors.palantir.com following the event.

An investor presentation, including supplemental financial information and reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, will be available through Palantir's Investor Relations website at https://investors.palantir.com, as well as a letter from our Chief Executive Officer, which will be available through Palantir's website at https://www.palantir.com.

Forward-Looking Statements

This press release and statements on our earnings webcast contain "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook, product development, distribution, and pricing, expected benefits of and applications for our software platforms, business strategy and plans (including strategy and plans relating to our sales and marketing efforts, sales force, partnerships, and customers), investments in our business, market trends and market size, opportunities (including growth opportunities), our expectations regarding our recent and potential investments in, and commercial contracts with, various entities, including special purpose acquisition companies and other privately-held or publicly-traded companies, and positioning. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management. Words such as "guidance," "expect," "anticipate," "should," "believe," "hope," "target," "project," "plan," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," "shall," and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to risks detailed in our filings with the Securities and Exchange Commission (the "SEC"), including in our annual report on Form 10-K for the fiscal year ended December 31, 2021 and other filings and reports that we may file from time to time with the SEC, including our quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2022. In particular, the following factors, among others, could cause our results to differ materially from those expressed or implied by such forward-looking statements: our ability to successfully execute our business and growth strategy; the sufficiency of our cash and cash equivalents to meet our liquidity needs; the demand for our platforms in general; our ability to increase our number of new customers and revenue generated from customers; our ability to realize some or all of the total contract value of customer contracts as revenue, including any contractual options available to customers or contractual periods that are subject to termination for convenience provisions; our long and unpredictable sales cycle; our ability to successfully grow our direct sales force and to successfully execute our channel sales and other strategic initiatives with third parties; our ability to retain and expand our customer base; the fluctuation of our results of operations and our key business measures on a quarterly basis in future periods; the seasonality of our business; the implementation process for our platforms, which may be complex and lengthy; our ability to successfully develop and deploy new technologies to address the needs of our existing or prospective customers; our ability to make our platforms easier to install and consume; our ability to maintain and enhance our brand and reputation; our ability to maintain and enhance our culture as our business grows; news or social media coverage about us, including but not limited to coverage that presents, or relies on, inaccurate, misleading, incomplete, or otherwise damaging information; the impact of recent or future global macroeconomic and geopolitical events, such as Russia's invasion of Ukraine, on the business and operations of our company or of our existing or prospective customers and partners; and any breach or access to customer or third-party data.

The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. Past performance is not necessarily indicative of future results.

Additional Definitions

For the purpose of this press release and our earnings webcast, the value of deals closed and total contract value (TCV) closed each reflect the total value of contracts that have been entered into with, or awarded by, our government and commercial customers.

The value of deals closed and TCV closed include existing contractual obligations and presume the exercise of all contract options available to our customers and no termination of contracts; however, the majority of our contracts are subject to termination provisions, including for convenience, and there can be no guarantee that contracts are not terminated or that contract options will be exercised.

Non-GAAP Financial Measures

This press release and the accompanying tables contain the non-GAAP financial measures adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes; adjusted operating margin; adjusted free cash flow; adjusted free cash flow margin; adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA"); adjusted EBITDA margin; adjusted net income; and adjusted earnings per share ("EPS"), diluted.

We believe these non-GAAP financial measures and other metrics described in this press release help us evaluate our business, identify trends affecting Palantir's business, formulate business plans and financial projections, and make strategic decisions. We exclude stock-based compensation, which is a non-cash expense, from these non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance and provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team. We exclude employer payroll taxes related to stock-based compensation, as it is difficult to predict and outside of Palantir's control. Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Further, these metrics have certain limitations, as they do not include the impact of certain expenses that are reflected in our consolidated statements of operations. For example, adjusted free cash flow does not reflect our future contractual commitments or the total increase or decrease in our cash balances for a given period. Thus, our non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.

We compensate for these limitations by providing a reconciliation of each of these non-GAAP measures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure.

A reconciliation table of the most comparable GAAP financial measure to each non-GAAP financial measure used in this press release is included at the end of this release. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, reconciling items that may be incurred in the future such as stock-based compensation and related employer payroll taxes, the effect of which may be significant.

Available Information

Palantir uses its Investor Relations website at https://investors.palantir.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Palantir's Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, and webcasts.

About Palantir Technologies Inc.

Foundational software of tomorrow. Delivered today. Additional information is available at https://www.palantir.com.

 

Palantir Technologies Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

 

 

 

 

Three Months Ended March 31,

 

 

2022

 

2021

Revenue

$

446,357

 

$

341,234

 

Cost of revenue (1)

 

94,403

 

 

74,111

 

Gross profit

 

351,954

 

 

267,123

 

Operating expenses:

 

 

Sales and marketing (1)

 

160,485

 

 

136,097

 

Research and development (1)

 

88,601

 

 

98,471

 

General and administrative (1)

 

142,307

 

 

146,569

 

Total operating expenses

 

391,393

 

 

381,137

 

Loss from operations

 

(39,439

)

 

(114,014

)

Interest income

 

547

 

 

376

 

Interest expense

 

(594

)

 

(1,840

)

Other income (expense), net

 

(59,870

)

 

(4,894

)

Loss before provision for income taxes

 

(99,356

)

 

(120,372

)

Provision for income taxes

 

2,023

 

 

3,102

 

Net loss

$

(101,379

)

$

(123,474

)

Net loss per share attributable to common stockholders, basic

$

(0.05

)

$

(0.07

)

Net loss per share attributable to common stockholders, diluted

$

(0.05

)

$

(0.07

)

Weighted-average shares of common stock outstanding used in computing net loss per share attributable to common stockholders, basic

 

2,036,307

 

 

1,821,158

 

Weighted-average shares of common stock outstanding used in computing net loss per share attributable to common stockholders, diluted

 

2,036,307

 

 

1,821,158

 

________________

(1) Includes stock-based compensation expense as follows (in thousands):

 

Three Months Ended March 31,

 

2022

 

2021

Cost of revenue

$

11,677

 

$

15,977

 

Sales and marketing

 

49,272

 

 

57,286

 

Research and development

 

26,905

 

 

37,874

 

General and administrative

 

61,469

 

 

82,594

 

Total stock-based compensation

$

149,323

 

$

193,731

 

 

Palantir Technologies Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

 

 

 

 

As of March 31,

 

As of December 31,

 

 

2022

 

2021

Assets

 

 

Current assets:

 

 

Cash and cash equivalents

$

2,269,411

 

$

2,290,674

 

Restricted cash

 

33,804

 

 

36,628

 

Accounts receivable

 

256,554

 

 

190,923

 

Marketable securities

 

252,563

 

 

234,153

 

Prepaid expenses and other current assets

 

115,042

 

 

110,872

 

Total current assets

 

2,927,374

 

 

2,863,250

 

Property and equipment, net

 

41,866

 

 

31,304

 

Restricted cash, noncurrent

 

29,222

 

 

39,612

 

Operating lease right-of-use assets

 

224,888

 

 

216,898

 

Other assets

 

95,829

 

 

96,386

 

Total assets

$

3,319,179

 

$

3,247,450

 

Liabilities and Stockholders' Equity

 

 

Current liabilities:

 

 

Accounts payable

$

27,454

 

$

74,907

 

Accrued liabilities

 

150,176

 

 

155,806

 

Deferred revenue

 

218,521

 

 

227,816

 

Customer deposits

 

232,908

 

 

161,605

 

Operating lease liabilities

 

40,045

 

 

39,927

 

Total current liabilities

 

669,104

 

 

660,061

 

Deferred revenue, noncurrent

 

33,244

 

 

40,217

 

Customer deposits, noncurrent

 

22,276

 

 

33,699

 

Operating lease liabilities, noncurrent

 

227,617

 

 

220,146

 

Other noncurrent liabilities

 

2,192

 

 

2,297

 

Total liabilities

 

954,433

 

 

956,420

 

Stockholders' equity:

 

 

Common stock

 

2,046

 

 

2,027

 

Additional paid-in capital

 

7,953,856

 

 

7,777,085

 

Accumulated other comprehensive loss

 

(4,044

)

 

(2,349

)

Accumulated deficit

 

(5,587,112

)

 

(5,485,733

)

Total stockholders' equity

 

2,364,746

 

 

2,291,030

 

Total liabilities and stockholders' equity

$

3,319,179

 

$

3,247,450

 

 

Palantir Technologies Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

 

 

Three Months Ended March 31,

 

 

2022

 

2021

Operating activities

 

 

Net loss

$

(101,379

)

$

(123,474

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

Depreciation and amortization

 

4,312

 

 

3,237

 

Stock-based compensation

 

149,323

 

 

193,731

 

Deferred income taxes

 

(3

)

 

1,846

 

Non-cash operating lease expense

 

10,142

 

 

6,477

 

Unrealized and realized (gain) loss from marketable securities, net

 

62,843

 

 

 

Other operating activities

 

(2,751

)

 

771

 

Changes in operating assets and liabilities:

 

 

Accounts receivable

 

(65,867

)

 

4,480

 

Prepaid expenses and other current assets

 

(4,320

)

 

(9,753

)

Other assets

 

2,891

 

 

(6,711

)

Accounts payable

 

(47,404

)

 

51

 

Accrued liabilities

 

(5,334

)

 

44,488

 

Deferred revenue, current and noncurrent

 

(16,335

)

 

(11,952

)

Customer deposits, current and noncurrent

 

59,822

 

 

20,825

 

Operating lease liabilities, current and noncurrent

 

(10,388

)

 

(7,132

)

Other noncurrent liabilities

 

(75

)

 

(3

)

Net cash provided by operating activities

 

35,477

 

 

116,881

 

Investing activities

 

 

Purchases of property and equipment

 

(15,215

)

 

(708

)

Purchases of marketable securities

 

(89,500

)

 

 

Proceeds from sales of marketable securities

 

8,247

 

 

 

Net cash used in investing activities

 

(96,468

)

 

(708

)

Financing activities

 

 

Proceeds from the exercise of common stock options

 

27,225

 

 

208,860

 

Other financing activities

 

16

 

 

(2,506

)

Net cash provided by financing activities

 

27,241

 

 

206,354

 

Effect of foreign exchange on cash, cash equivalents, and restricted cash

 

(727

)

 

(2,197

)

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

(34,477

)

 

320,330

 

Cash, cash equivalents, and restricted cash - beginning of period

 

2,366,914

 

 

2,128,146

 

Cash, cash equivalents, and restricted cash - end of period

$

2,332,437

 

$

2,448,476

 

Palantir Technologies Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited)

Non-GAAP Reconciliations

Adjusted Income from Operations and Adjusted Operating Margin (in thousands, except percentages)

 

 

Three Months Ended March 31,

 

2022

 

2021

Loss from operations

$

(39,439

)

 

$

(114,014

)

Add: stock-based compensation

 

149,323

 

 

 

193,731

 

Add: employer payroll taxes related to stock-based compensation

 

7,506

 

 

 

36,866

 

Adjusted income from operations

$

117,390

 

 

$

116,583

 

Adjusted operating margin

 

26

%

 

 

34

%

 

Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin (in thousands, except percentages)

 

 

Three Months Ended March 31,

 

2022

 

2021

Net cash provided by operating activities

$

35,477

 

 

$

116,881

 

Cash paid for employer payroll taxes related to stock-based compensation

 

9,524

 

 

 

34,802

 

Less: purchases of property and equipment

 

(15,215

)

 

 

(708

)

Adjusted free cash flow

$

29,786

 

 

$

150,975

 

Adjusted free cash flow margin

 

7

%

 

 

44

%

 

Adjusted EBITDA (in thousands)

 

 

Three Months Ended March 31,

 

2022

 

2021

Net loss

$

(101,379

)

 

$

(123,474

)

Less: interest income

 

(547

)

 

 

(376

)

Add: interest expense

 

594

 

 

 

1,840

 

Add: other (income) expense, net

 

59,870

 

 

 

4,894

 

Add: provision for income taxes

 

2,023

 

 

 

3,102

 

Add: depreciation and amortization

 

4,312

 

 

 

3,237

 

Add: stock-based compensation

 

149,323

 

 

 

193,731

 

Add: employer payroll taxes related to stock-based compensation

 

7,506

 

 

 

36,866

 

Adjusted EBITDA

$

121,702

 

 

$

119,820

 

 

Adjusted Earnings Per Share, Diluted (in thousands, except per share amounts)

 

 

Three Months Ended March 31,

 

2022

 

2021

Net loss

$

(101,379

)

 

$

(123,474

)

Add: stock-based compensation

 

149,323

 

 

 

193,731

 

Add: employer payroll taxes related to stock-based compensation

 

7,506

 

 

 

36,866

 

Less: income tax effect related to adjustments (1)

 

(10,737

)

 

 

(24,472

)

Adjusted net income attributable to common stockholders, diluted

$

44,713

 

 

$

82,651

 

Weighted-average shares used in computing GAAP net loss per share, diluted

 

2,036,307

 

 

 

1,821,158

 

Adjusted weighted-average shares used in computing adjusted earnings per share, diluted (2)

 

2,209,310

 

 

 

2,330,865

 

Adjusted earnings per share, diluted

$

0.02

 

 

$

0.04

 

________________

(1)

Income tax effect is based on long-term estimated annual effective tax rates of 22.2% for the periods ended 2022 and 2021.

(2)

Includes an additional 173 million and 510 million dilutive securities for the three months ended March 31, 2022 and 2021, respectively, that are excluded from a GAAP perspective due to the Company's net loss position.

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