Shares of Palantir drop after mixed fourth quarter results

Data management and analytics provider Palantir Technologies Inc. today posted better-than-expected fourth quarter revenue, but its earnings per share were lower than anticipated. 

The mixed results sent Palantir’s stock tumbling as much as 13% in trading this morning. The company’s shares have since recovered some of their losses. 

Palantir provides software that government organizations and enterprises use to support their data analytics initiatives. The company initially focused on working with public sector customers such as the U.S Department of Defense. Palantir has over the years also established a sizable presence in the private sector, which is now an important source of revenue growth for the company.

Palantir’s software products help organizations more easily collect information from different sources for analysis. Its products also provide features for simplifying related tasks, such as deploying machine learning models that can analyze data to find useful insights. 

Palantir’s revenue grew 34% year-over-year in the fourth quarter to $433 million. Analysts polled for the Refinitiv consensus estimate had expected $418 million. 

One of the factors behind the company’s better-than-expected quarterly sales was a 47% increase in revenue from its commercial business, which focuses on private sector customers. Palantir’s commercial business experienced particularly strong momentum in the U.S. The unit’s U.S. sales jumped 132% year-over-year, the company detailed its earnings report today. 

The public sector, Palantir’s original focus area, continues to be an important market for the company. Palantir said that its government business recorded a 26% year-over-year revenue increase in the fourth quarter.

Across its commercial and government businesses, Palantir onboarded 34 net new customers during the quarter. It closed a total of 64 deals. Of those deals, 27 are worth more than $5 million, while 19 are expected to generate more than $10 billion in revenue for the company.

Palantir reported a net loss of $156.19 million for the fourth quarter, up from $148.34 million a year ago. The company’s adjusted net earnings, meanwhile, amounted to $0.02 per share, missing the consensus analyst estimate of $0.04 cents per share.

Palantir anticipates its revenue momentum to continue in the current quarter. The company estimates that it will close the first three months of 2022 with $443 million in revenue, more than the $439 million that analysts polled by Refinitiv had expected the company to project as part of its guidance. 

Palantir has stated that it expects revenues to grow at a rate of 30% or more annually every year through 2025. The company’s revenue grew 41% in 2021. Palantir’s government business accounted for $897 million of the $1.54 billion in total sales it generated during 2021, while commercial revenue reached $645 million. 

Photo: Cory Doctorow/Flickr