By Chavi Mehta
(Reuters) – Palantir Technologies Inc on Monday posted a 22% rise in its quarterly revenue and forecast a better-than-expected fourth-quarter revenue due to renewal and expansion of U.S. government contracts and a growing commercial business.
The data analytics software provider also said that out of the $1.3 billion worth of contracts closed in the third quarter, roughly $1 billion were from the U.S. government, with its total customer count growing 66%.
“The significant increase in contract value this quarter was principally driven by the expansion of our work with the United States military,” its Chief Executive Officer Alexander Karp said in a letter to shareholders.
“Our software is at war, in Europe and around the world.”
Palantir, which has said it only works with allies of the United States, was co-founded by billionaire entrepreneur Peter Thiel in 2003 to help with U.S. counter-terrorism operations.
For the third quarter, Palantir’s revenue rose 22% to $477.9 million, its slowest growth since it went public in 2020. The number was still higher than analysts’ expectations of $470.3 million, according to Refinitiv data.
Analysts had also expected the Ukraine war to draw in more business to Palantir, but its Chief Financial Officer David Glazer told Reuters that the company remains uncertain on the timing of new government contracts.
The company has been diversifying into commercial business to reduce its dependence on uncertain government contracts, with its U.S. commercial business growing 53% in the quarter ended Sept. 30.
However, a strong dollar and a high interest-rate environment have affected business in Europe. Its CEO Karp said some countries, particularly in Europe, have fallen behind the United States “in their willingness and ability to implement enterprise software systems that challenge existing habits and modes of operation.”
Excluding a $5 million forex hit, the company now expects fourth-quarter revenue to be between $508 million and $510 million. Analysts on average see revenue at $502.7 million.
For fiscal 2022, Palantir said it expects revenue between $1.906 billion to $1.908 billion excluding foreign exchange impact.
(Reporting by Chavi Mehta in Bengaluru; editing by Uttaresh.V)
