Palantir Technologies Inc. (NASDAQ:PLTR) today announced financial results for the fourth quarter and fiscal year ended December 31, 2025.
Financial Results: Q4 2025 Overview
Palantir delivered a standout fourth quarter for the 2025 calendar year:
Revenue: $1.41 billion, a 70% year-over-year increase, topping expectations of $1.34 billion.
Adjusted EPS: $0.25, beating street estimates ($0.23).
Net Income: $609 million for the quarter, well above forecasts.
Segment Growth
U.S. commercial revenue surged 137% YoY to $507 million.
U.S. government revenue grew 66% YoY to$570 million.
Record Metrics
Rule of 40 score, a key metric combining growth and profitability hit 127%, one of the highest levels in the software industry.
Cash & Liquidity: $7.2 billion in cash, equivalents and T-Bills.
Key Financial Takeaways:
The Rule of 40 (Growth + Margin): A score of 40% is considered “healthy” for SaaS companies. Palantir hit 127%, a figure that is virtually unheard of at this scale, driven by 70% revenue growth and a 57% adjusted operating margin.
Cash Fortress: The company ended the quarter with $7.2 billion in cash and equivalents, providing immense flexibility for R&D or strategic acquisitions.
Net Income: GAAP Net Income stood at $609 million (43% margin), silencing any remaining critics regarding their ability to be profitable on a GAAP basis.
Deep Dive: The “AIP” Effect
The engine behind this quarter’s explosion is the Artificial Intelligence Platform (AIP).
Bootcamps as a Sales Weapon: The “Bootcamp” sales model where engineers deploy usable AI workflows for customers in days rather than months has drastically shortened sales cycles.
U.S. Commercial Dominance: Revenue here grew 137% YoY. This is the metric investors care about most, as it proves Palantir is winning the race to be the operating system for corporate America.
Contract Value: Total Contract Value (TCV) closed in the quarter was $4.26 billion, up 138% YoY. This massive backlog ensures that revenue growth will remain durable well into 2026.
Conference Call & Management Highlights
CEO Alex Karp and the management team were visibly confident, emphasizing that Palantir has separated itself from the pack of “AI pretenders.”
“We Are an N of 1”
Alex Karp famously stated on the call that Palantir is an “N of 1” (a sample size of one), implying they have no true competitors. He noted that while other tech giants are selling “AI components” (chips, models, chat interfaces), Palantir is the only one selling a coherent operating system that allows enterprises to actually use those models safely and effectively.
The “US-First” Divergence
Management highlighted a divergence between the U.S. and Europe. U.S. companies are adopting AIP aggressively to gain a competitive edge, while international markets are slower. Karp suggested this “technological nationalism” is creating a massive advantage for American industry.
“Commodity Cognition”
A key strategic insight shared was the idea of “commodity cognition.” Palantir believes that the underlying Large Language Models (LLMs) like GPT-4 or Gemini—will become commodities. The real value lies not in the model itself, but in the ontology (the software layer) that connects that model to a company’s proprietary data. This is Palantir’s moat.
2026 Guidance: Flooring the Gas Pedal
Palantir did not just beat Q4; they raised the bar significantly for 2026.
Q1 2026 Revenue: Guided to $1.53-$1.54 billion (implies continued acceleration).
Full Year 2026 Revenue: Projected at $7.18-$7.20 billion, representing a 61% growth rate.
U.S. Commercial Outlook: Explicitly guided for 115% growth in 2026, signaling that the “AIP boom” is still in its early innings.
Conclusion
Palantir’s Q4 2025 earnings marked a significant milestone, characterized by robust revenue growth well ahead of expectations, strong profitability metrics, and a confident outlook for 2026 driven by AI demand. The company’s ability to blend aggressive growth with solid margin performance sets it apart in a competitive software landscape.
Investors should view the results as a proof point for Palantir’s strategic pivot toward AI-led commercial expansion while retaining a stable government revenue base. However, long-term valuation considerations and macro policy risk remain important for balanced analysis.
