Earnings Call Insights: Palantir Technologies (PLTR) Q4 2025
Management View
- Ryan Taylor, Chief Revenue Officer & Chief Legal Officer, described the fourth quarter as “nothing short of historic, capping off a monumental year for our business,” highlighting a 70% year-over-year overall revenue surge and 93% year-over-year growth in the U.S. business, which now constitutes 77% of total revenue. Taylor emphasized, “Our Rule of 40 score reached new heights at 127%, up 46 points year-over-year and 13 points quarter-over-quarter.” He noted the highest TCV quarter ever at $4.3 billion, driven by significant customer expansion and rapid AI adoption across core industries.
- Taylor stated, “Our U.S. commercial business grew 137% year-over-year and 28% sequentially, building on the blistering pace of 121% year-over-year in Q3 and 93% year-over-year growth in Q2, defying conventional enterprise software dynamics.”
- Taylor pointed to major U.S. government momentum, including a $448 million contract with the U.S. Navy, and characterized Palantir as entering 2026 “with extremely strong footing.”
- Shyam Sankar, CTO & Executive VP, outlined advancements in AI products, including Hivemind and AI FDE, and their impact on customer productivity, real-world AI deployments, and the U.S. defense sector, stating, “AI FDE is now capable of powering complex SAP ERP migrations from ECC to S/4, years of work now done in as little as 2 weeks.”
- David Glazer, CFO & Treasurer, reported, “In the fourth quarter, we generated our highest ever reported revenue growth rate of 70% year-over-year, exceeding the high end of our prior guidance by over 900 basis points.” Glazer added, “We are guiding a full year 2026 revenue of $7.190 billion at the midpoint, representing 61% growth year-over-year.”
- Alexander Karp, Co-Founder, CEO & Director, described the results as “truly iconic performances in the history of corporate performance or technology,” underscoring the rapid growth and unique market position of Palantir.
Outlook
- Glazer outlined Q1 2026 revenue guidance of between $1.532 billion and $1.536 billion and adjusted income from operations of between $870 million and $874 million.
- For full year 2026, management expects revenue of between $7.182 billion and $7.198 billion, U.S. commercial revenue in excess of $3.144 billion, adjusted income from operations of between $4.126 billion and $4.142 billion, and adjusted free cash flow of between $3.925 billion and $4.125 billion.
- Management stated, “We are guiding to a Rule of 40 score of 118% for the full year.”
Financial Results
- Fourth quarter revenue reached $1.407 billion, up 70% year-over-year and 19% sequentially. Full year revenue was $4.475 billion, a 56% increase year-over-year.
- U.S. revenue for Q4 was $1.076 billion, rising 93% year-over-year and 22% sequentially. Full year U.S. revenue totaled $3.320 billion, up 75% year-over-year.
- Adjusted operating income for Q4 was $798 million, with a 57% margin. Full year adjusted operating income was $2.3 billion, a 50% margin.
- Adjusted free cash flow for the year was $2.3 billion, representing an 82% year-over-year increase.
- Customer count reached 954, up 34% year-over-year and 5% sequentially. Net dollar retention increased to 139%.
- Q4 GAAP earnings per share were $0.24; full year GAAP EPS was $0.63. Q4 adjusted EPS was $0.25; full year adjusted EPS was $0.75.
Q&A
- Mariana Perez Mora, BofA Securities: Asked if 2026 is shaping up as a “show-me story for AI” and about commercial hesitancy and ShipOS expansion for defense. Ryan Taylor responded that Palantir’s strategy is about “delivering value impact…as quickly as possible,” citing 61 deals over $10 million and deeper client engagement. Alexander Karp added, “In the American market, we have inbounds where people have already seen proof points at other companies…the conversation now is, I’ve heard you made this work.”
- Daniel Ives, Wedbush: Queried if Palantir is capturing a larger share of budgets on both commercial and government sides. Karp answered, “What you will see is inexplicable growth in revenue, but not inexplicable growth in customers…customers that are serious are putting a lot of their most important problems in our hands.”
- A shareholder asked about international business reacceleration. Karp noted challenges outside the U.S. due to domestic purchasing structures and emphasized Palantir’s focus on high-quality U.S. demand.
Sentiment Analysis
- Analysts pressed on sustainability of growth and breadth of AI adoption, reflecting a positive to slightly skeptical tone, especially regarding international expansion and product differentiation.
- Management presented a highly confident, sometimes exuberant tone in both prepared remarks and Q&A, using phrases like “truly iconic performances” and “we are an N-of-1 category.” During exchanges, the tone remained assertive, especially when discussing the company’s competitive positioning and customer commitment.
- Compared to the previous quarter, both analysts and management displayed increased confidence, with management showing bolder language and analysts focusing more on Palantir’s ability to maintain momentum and expand globally.
Quarter-over-Quarter Comparison
- Revenue growth accelerated from 63% year-over-year in Q3 to 70% in Q4, with the U.S. business rising from 77% to 93% year-over-year. The Rule of 40 score increased from 114% to 127%.
- Full year 2026 guidance was raised to 61% growth, up from more modest expectations in the prior quarter. U.S. commercial growth guidance increased notably.
- Management’s tone grew more confident and celebratory, while analysts shifted from general growth questions to probing on international scaling and competitive dynamics.
- Strategic focus remained on AI product leadership and deepening U.S. market penetration, with greater emphasis on large-scale government contracts and vertical expansion such as ShipOS.
Risks and Concerns
- Management highlighted the difficulty of expanding outside the U.S., noting, “we really don’t have the bandwidth to do anything that’s difficult outside of America.”
- Karp observed that “the real difficulty for the world is if Palantir is going to bear a lot of the weight of this work we are scaling,” raising questions about global institutional readiness.
- Analysts questioned international reacceleration and sustainability of extraordinary growth rates, particularly as competition in AI intensifies.
Final Takeaway
Palantir’s management emphasized that the company delivered historic growth in 2025, driven by explosive U.S. demand and rapid AI adoption across core markets. With record-setting revenue, profitability, and customer expansion, the team signaled strong confidence entering 2026, targeting 61% full year top-line growth and expecting continued outperformance in both commercial and government sectors. The leadership underscored Palantir’s unique market position, technological differentiation, and the ongoing challenge of replicating its U.S. success internationally, framing the results as a testament to the company’s strategy and focus on transformational impact at scale.