Palantir reported second-quarter results that came in well ahead of Wall Street expectations and raised its full-year outlook, as demand from enterprise customers for data analytics and AI tools stayed strong. The company said full-year revenue could reach as much as $8.16 billion, above the $7.7 billion analysts had expected. Its shares rose as much as 15% to $144.65 in after-hours trading after the release.
Full-year guidance moved higher after stronger-than-expected quarter
According to ABMedia, Palantir’s latest second-quarter report showed operating performance that was notably ahead of market expectations. The company raised its forecast for full-year adjusted income from operations to $4.89 billion to $4.91 billion, above the previous upper end of $4.45 billion.
It also lifted its revenue outlook for the full year to as much as $8.16 billion. That compares with the analyst average estimate of $7.7 billion.
U.S. commercial business led growth
The standout number in the quarter came from Palantir’s U.S. commercial business. Chief executive Alex Karp said second-quarter U.S. commercial revenue reached $764 million, up 149% from a year earlier and above the analyst consensus of $716.4 million.
Including government business, total U.S. revenue rose 115% year over year to $1.57 billion. That made the domestic market the main driver of the company’s overall growth in the period.
International growth was slower, with policy pressure in Europe
Outside the United States, Palantir’s business expanded at a more moderate pace. International revenue increased 33% from a year earlier to $362.5 million.
ABMedia said the company has faced tougher conditions in overseas markets as some European countries, including France and the U.K., have shifted policy support toward local technology providers. Even so, the strength of Palantir’s U.S. business helped ease market concerns.
Gross margin slipped to 86% as cloud hosting affected costs
CFO Dave Glazer said adjusted gross margin edged down to 86% in the second quarter because of cloud hosting work for government customers.
He also said expenses are expected to increase in the third quarter as seasonal hiring and marketing activity pick up. The report noted that product marketing and labor costs are set to rise in the second half of the year.
Management pushed back on AI replacement concerns
Management also addressed concerns that AI model developers such as Anthropic could bypass Palantir by selling software directly to customers. The company said its products are positioned as an integration and management interface for large language models, not as a single model itself.
Palantir said its software lets enterprise customers switch among different AI models, which helps them avoid becoming overly dependent on any one model developer. Karp said customers have refused to become “vassal states of the language labs,” and described Palantir as a company that “allows you to switch models.”