PLTR
$7.28
Palantir Technologies Inc Cl A
($.09)
(1.22%)
Earnings Details
3rd Quarter September 2022
Monday, November 07, 2022 7:00:00 AM
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Summary

Palantir Sees Fourth Quarter Above Estimates

Palantir Technologies Inc Cl A (PLTR) reported breakeven results for the 3rd Quarter September 2022 on revenue of $477.9 million. The consensus earnings estimate was $0.02 per share on revenue of $474.6 million. The Earnings Whisper number was for breakeven results. Revenue grew 21.9% on a year-over-year basis.

The company said it expects fourth quarter revenue of $503.0 million to $505.0 million. The current consensus revenue estimate is $502.7 million for the quarter ending December 31, 2022.

Palantir Technologies Inc. is a software company that builds enterprise data platforms for use by organizations with complex and sensitive data environments.

Results
Reported Earnings
$0.00
Earnings Whisper
$0.00
Consensus Estimate
$0.02
Reported Revenue
$477.9 Mil
Revenue Estimate
$474.6 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Palantir Reaffirms FY'22 Revenue Guidance, Reports Revenue Growth of 22% Y/Y for Q3 2022

DENVER, Nov. 7, 2022 /PRNewswire/ -- Palantir Technologies Inc. (NYSE:PLTR) today announced financial results for the third quarter ended September 30, 2022.

"We beat expectations for revenue growth this quarter and expect to have a strong finish to the year, even in the face of the continued strength of the U.S. dollar," said Alexander C. Karp, Co-Founder and Chief Executive Officer of Palantir Technologies Inc.

Q3 2022 Highlights

  • Revenue grew 22% year-over-year to $478 million
  • US revenue grew 31% year-over-year to $297 million
  • US commercial revenue grew 53% y/y
  • US government revenue grew 23% y/y
  • Total contract value ("TCV") closed of $1.3 billion, including US TCV closed of $1.1 billion
  • Customer count grew 66% y/y and 11% q/q
  • US commercial customer count increased 124% year-over-year, from 59 customers in Q3 2021 to 132 customers in Q3 2022
  • Loss from operations of $(62) million, representing a margin of (13)%, up 1,000 basis points year-over-year
  • Adjusted income from operations of $81 million, representing a margin of 17%
  • Cash from operations of $47 million, representing a 10% margin
  • Adjusted free cash flow ("AFCF") of $37 million, representing an 8% margin
  • This marks the 8th consecutive quarter of positive AFCF

Q3 2022 TTM Highlights

  • US revenue of $1.11 billion on a trailing-twelve-month ("TTM") basis, representing a 38% growth rate y/y
  • Government revenue of $1.02 billion on a TTM basis, representing a 20% growth rate y/y and surpassing the $1 billion mark for the first time in company history
  • Cash from operations of $238 million, representing a 13% margin
  • Adjusted free cash flow of $231 million, representing a 13% margin

Q3 2022 Financial Summary

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

Third Quarter

Amount

Revenue

$          477,880



Year-over-year growth

22 %








Amount


Margin

Loss from Operations

$          (62,191)


(13) %

Adjusted Income from Operations

$            81,250


17 %

Cash from Operations

$            47,066


10 %

Adjusted Free Cash Flow

$            36,560


8 %

Net Loss

$        (123,875)



Adjusted Net Income

$            16,075



Adjusted EBITDA

$            87,192


18 %

GAAP Net Loss Per Share, Diluted

$              (0.06)



Adjusted Earnings Per Share, Diluted

$                0.01



Outlook  

For full year 2022:

We are reaffirming our revenue guidance of $1.9 - $1.902 billion despite a negative $6 million currency impact since our prior quarter's guidance.

  • Excluding such impact, we would expect full year 2022 revenue of $1.906 - $1.908 billion.

We are raising our outlook for adjusted income from operations to between $384 - $386 million.

For Q4 2022:

After factoring in a negative $5 million currency impact since our prior quarter's guidance, we expect revenue of $503 - $505 million.

  • Excluding such impact, we would expect fourth quarter revenue of $508 - $510 million

We expect adjusted income from operations of $78 - $80 million.

CEO Letter

Palantir CEO Alex Karp's quarterly letter to shareholders is available through Palantir's website at https://www.palantir.com/q3-2022-letter.

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 third quarter ended September 30, 2022 and financial outlook. The webcast can be accessed by registering online at https://palantir.events/palantir-2022-q3. 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.

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, our expectations regarding macroeconomic events and foreign currency fluctuations, 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 September 30, 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, foreign currency fluctuations, or rising inflation or interest rates in the U.S. and in other countries, 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 TCV closed each reflect the total contract 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.

For the purpose of this press release and our earnings webcast, we have estimated the impact of foreign currency rates as a result of the general strengthening of the U.S. Dollar ("USD") during the current period and as anticipated for the remainder of fiscal year 2022, by applying (i) the difference between the currency rates in effect for the initial month of the current period and the currency rates in effect or anticipated to be in effect for each subsequent month during the impacted period to (ii) the actual or projected revenue associated with each month during the impacted period.

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.

Contact

Investor Relations
investors@palantir.com

Media
media@palantir.com

 

Palantir Technologies Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)



Three Months Ended
September 30,


Nine Months Ended
September 30,


2022


2021


2022


2021

Revenue

$         477,880


$         392,146


$      1,397,247


$      1,109,022

Cost of revenue (1)

107,611


86,804


304,238


251,841

Gross profit

370,269


305,342


1,093,009


857,181

Operating expenses:








Sales and marketing (1)

182,918


153,443


512,278


451,919

Research and development (1)

100,863


94,316


277,635


303,311

General and administrative (1)

148,679


149,524


446,471


454,054

Total operating expenses

432,460


397,283


1,236,384


1,209,284

Loss from operations

(62,191)


(91,941)


(143,375)


(352,103)

Interest income

5,540


379


7,559


1,127

Interest expense

(1,082)


(609)


(2,346)


(3,039)

Other income (expense), net

(65,046)


(8,528)


(260,714)


(11,297)

Loss before provision for (benefit from) income taxes

(122,779)


(100,699)


(398,876)


(365,312)

Provision for (benefit from) income taxes

1,096


1,438


5,707


(1,121)

Net loss

$       (123,875)


$       (102,137)


$       (404,583)


$       (364,191)

Net loss per share attributable to common stockholders, basic

$             (0.06)


$             (0.05)


$             (0.20)


$             (0.19)

Net loss per share attributable to common stockholders, diluted

$             (0.06)


$             (0.05)


$             (0.20)


$             (0.19)

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

2,073,265


1,964,395


2,054,926


1,893,911

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

2,073,265


1,964,395


2,054,926


1,893,911

 

—————

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

 


Three Months Ended September
30,


Nine Months Ended September
30,


2022


2021


2022


2021

Cost of revenue

$            10,525


$            14,860


$            33,413


$            54,866

Sales and marketing

48,824


57,124


147,501


186,418

Research and development

25,113


34,472


76,996


122,976

General and administrative

55,846


78,379


177,490


247,048

Total stock-based compensation

$          140,308


$          184,835


$          435,400


$          611,308

 

Palantir Technologies Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)



As of September 30,


As of December 31,


2022


2021

Assets




Current assets:




Cash and cash equivalents

$               2,411,290


$               2,290,674

Restricted cash

20,557


36,628

Accounts receivable, net

343,264


190,923

Marketable securities

57,342


234,153

Prepaid expenses and other current assets

114,157


110,872

Total current assets

2,946,610


2,863,250

Property and equipment, net

57,822


31,304

Restricted cash, noncurrent

20,902


39,612

Operating lease right-of-use assets

199,359


216,898

Other assets

94,142


96,386

Total assets

$               3,318,835


$               3,247,450

Liabilities and Stockholders' Equity




Current liabilities:




Accounts payable

$                    59,507


$                    74,907

Accrued liabilities

164,697


155,806

Deferred revenue

189,771


227,816

Customer deposits

234,142


161,605

Operating lease liabilities

40,233


39,927

Total current liabilities

688,350


660,061

Deferred revenue, noncurrent

31,383


40,217

Customer deposits, noncurrent

5,533


33,699

Operating lease liabilities, noncurrent

204,903


220,146

Other noncurrent liabilities

2,051


2,297

Total liabilities

932,220


956,420

Stockholders' equity:




Common stock

2,080


2,027

Additional paid-in capital

8,284,686


7,777,085

Accumulated other comprehensive loss

(9,835)


(2,349)

Accumulated deficit

(5,890,316)


(5,485,733)

Total stockholders' equity

2,386,615


2,291,030

Total liabilities and stockholders' equity

$               3,318,835


$               3,247,450

 

Palantir Technologies Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)



Nine Months Ended September 30,


2022


2021

Operating activities




Net loss

$                (404,583)


$                (364,191)

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




Depreciation and amortization

15,149


11,057

Stock-based compensation

435,400


611,308

Deferred income taxes

(31)


337

Non-cash operating lease expense

30,130


23,417

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

260,720


7,238

Other operating activities

2,344


3,076

Changes in operating assets and liabilities:




Accounts receivable

(154,591)


(15,412)

Prepaid expenses and other current assets

(5,780)


(7,872)

Other assets

10,490


(7,032)

Accounts payable

(15,165)


1,158

Accrued liabilities

(828)


20,360

Deferred revenue, current and noncurrent

(44,912)


(3,781)

Customer deposits, current and noncurrent

44,263


(16,227)

Operating lease liabilities, current and noncurrent

(27,437)


(22,786)

Other noncurrent liabilities

(195)


(226)

Net cash provided by operating activities

144,974


240,424

Investing activities




Purchases of property and equipment

(35,109)


(6,783)

Purchases of marketable securities

(124,500)


(155,315)

Proceeds from sales of marketable securities

36,482


Proceeds from redemption of marketable securities

4,619


Purchases of alternative investments


(50,941)

Other investing activities


(3,000)

Net cash used in investing activities

(118,508)


(216,039)

Financing activities




Principal payments on borrowings


(200,000)

Proceeds from the exercise of common stock options

72,108


474,683

Other financing activities

(269)


(401)

Net cash provided by financing activities

71,839


274,282

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

(12,470)


(3,638)

Net increase in cash, cash equivalents, and restricted cash

85,835


295,029

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

2,366,914


2,128,146

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

$               2,452,749


$               2,423,175

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
September 30,


Nine Months Ended
September 30,


2022


2021


2022


2021

Loss from operations

$      (62,191)


$      (91,941)


$    (143,375)


$    (352,103)

Add: stock-based compensation

140,308


184,835


435,400


611,308

Add: employer payroll taxes related to stock-based compensation

3,133


23,215


14,464


90,214

Adjusted income from operations

$        81,250


$      116,109


$      306,489


$      349,419

Adjusted operating margin

17 %


30 %


22 %


32 %

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


Three Months Ended
September 30,


Nine Months Ended
September 30,


2022


2021


2022


2021

Net cash provided by operating activities

$        47,066


$      100,793


$      144,974


$      240,424

Add: cash paid for employer payroll taxes related to stock-based compensation

3,930


23,717


17,387


86,289

Less: purchases of property and equipment

(14,436)


(5,377)


(35,109)


(6,782)

Adjusted free cash flow

$        36,560


$      119,133


$      127,252


$      319,931

Adjusted free cash flow margin

8 %


30 %


9 %


29 %

Adjusted EBITDA (in thousands)


Three Months Ended
September 30,


Nine Months Ended
September 30,


2022


2021


2022


2021

Net loss

$       (123,875)


$       (102,137)


$       (404,583)


$       (364,191)

Less: interest income

(5,540)


(379)


(7,559)


(1,127)

Add: interest expense

1,082


609


2,346


3,039

Add: other (income) expense, net

65,046


8,528


260,714


11,297

Add: provision for (benefit from) income taxes

1,096


1,438


5,707


(1,121)

Add: depreciation and amortization

5,942


3,058


15,149


11,057

Add: stock-based compensation

140,308


184,835


435,400


611,308

Add: employer payroll taxes related to stock-based compensation

3,133


23,215


14,464


90,214

Adjusted EBITDA

$           87,192


$         119,167


$         321,638


$         360,476

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

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


Three Months Ended
September 30,


Nine Months Ended
September 30,


2022


2021


2022


2021

Net loss

$       (123,875)


$       (102,137)


$       (404,583)


$       (364,191)

Add: stock-based compensation

140,308


184,835


435,400


611,308

Add: employer payroll taxes related to stock-based compensation

3,133


23,215


14,464


90,214

Add (less): income tax effect and adjustments (1)

$            (3,491)


$          (23,834)


$            (5,613)


$          (74,647)

Adjusted net income attributable to common stockholders, diluted

16,075


82,079


39,668


262,684

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

2,073,265


1,964,395


2,054,926


1,893,911

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

2,142,506


2,341,270


2,156,288


2,329,889

Adjusted earnings per share, diluted

$               0.01


$               0.04


$               0.02


$               0.11

 

————

(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 69 million and 101 million dilutive securities for the three and nine months ended September 30, 2022, respectively, and an additional 377 million and 436 million dilutive securities for the three and nine months ended September 30, 2021, respectively, that were excluded from a GAAP perspective due to the Company's net loss position.

Calculations of Foreign Exchange Rate Impacts (in thousands)


Three Months Ended
September
30, 2022


Three Months
Ended December
31, 2022
(Guidance
Midpoint)


Fiscal Year
Ended December
31, 2022
(Guidance
Midpoint)

Revenue

$                477,880


$                503,753


$             1,901,000

Add: currency impact (1)

1,359


4,607


5,966

Revenue with currency impact

$                479,239


$                508,360


$             1,906,966

 

————

(1)

The currency impact is calculated by applying (i) the difference between the currency rates in effect for the initial month of the current period and the currency rates in effect or anticipated to be in effect for each subsequent month of the impacted period to (ii) the actual or expected revenue associated with such month of the impacted period.

 

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SOURCE PALANTIR TECHNOLOGIES INC.