Palantir Technologies Inc.

Q1 2026 Earnings Call — May 4, 2026

Management: Counterintuitive. Don't use AI to reduce calls. Use it to generate them. An AI advocate that proactively calls on every customer's behalf. The point is simple. Use AI to do more work. Work that was never economically feasible before AIP. For every agent action, our customers need to answer three questions. Who authorized this? What did it cost? Can I trust what it did? These questions need exact answers with precision. There's no tolerance for slop. We're building a platform-native agent-engine SDK, a single set of primitives for building, persisting, governing, and operating ontology-native agents. A common layer that lets you visualize every agent in your enterprise and control it, regardless of how it was built. A true agent operating system. On top of that, unified cost attribution per agent, per session, per workflow, with administrative caps. Full provenance, so every ontology mutation traces back to the agent and reasoning chain that produced it. Security marking propagation from input data through agent sessions onto all output with approval gates for any workflow that could reclassify information. That's how you get a CISO, a CFO, and a combat commander to say yes. AIP is the no-slop zone, the platform where every agent action is governed, attributed, and auditable.

Turning to U.S. government, on the foxhole side, Maven met its moment across real-world events in Q1. Usage has doubled in the past four months through the end of March and is now 4X over the past 12 months across the services, the combatant commands, the joint staff, and the intelligence community. When the stakes are highest, when failure is measured in lives and readiness, this is where we are uniquely positioned. On the factory floor side, the demand on the defense industrial base to ramp production and sustainment has been so acute that we have surged resources from our commercial business. This is exactly what Warp Speed was built for, modernized American manufacturing. And we're doing just that, where it counts the most. AIP is the default builder platform in the Department of War, with thousands of developers using AIFD, migrating legacy systems, standing up new capabilities, solving problems that used to require contractor teams and months of lead time. Our software is becoming the most malleable and responsive weapon system for the Joint Force.

Finally, what's now clear is that Nethos and Spud and even other current generation models with AIP are capable of finding novel vulnerabilities in complex cyber kill chains. They have discovered thousands of zero days in major operating systems and browsers. This is the Spudnik moment in the AI arms race. The rate of vulnerability identification is about to skyrocket. Finding the bugs is no longer the limiting factor. Rapid-fire remediation with exact precision, immediacy, and absolute certainty is the new hard problem. Knowing exactly what versions of what software are running where and closing the remediation chain autonomously. Apollo was built for exactly this. We're shipping the next generation of Apollo as we help our customers reposture for this world. And note the Jevons paradox dynamic here, too. More AI means more code. More code means more slot. More slot means more attack surface. More attack surface means more vulnerabilities. And more vulnerabilities means more Apollo.

I'll turn it over to Dave.

Dave (Title): Thanks, Sean. We had an outstanding first quarter delivering our strongest ever Q1 sequential growth rate of 60% and our highest ever reported year-over-year growth rate of 85%. Our revenue growth rate accelerated for the 11th consecutive quarter, highlighting the durability of the growth of our business at scale. We expanded our Rule of 40 score by 18 points quarter over quarter from 127 in Q4 to 145 in Q1. Our U.S. business achieved triple-digit growth for the first time, driven by accelerating demand for our AI platform. Revenue in our U.S. business grew 104% year over year and 19% sequentially in the first quarter. Our U.S. commercial business grew 133% year-over-year and 18% sequentially, and our U.S. government business grew 84% year-over-year and 21% sequentially.

On the back of this continued strength in the U.S., we are raising our full-year 2026 revenue guidance midpoint to $7.656 billion, representing 71% growth year-over-year, a 10-point increase over our full-year 2026 revenue guidance from last quarter, and our largest-ever full-year revenue guidance raise. Turning to our global top line results. First quarter revenue grew 85% year over year and 16% sequentially to $1.633 billion. First quarter U.S. revenue grew 104% year over year and 19% sequentially to $1.282 billion. Customer count grew 31% year over year and 6% sequentially to 1,007 customers. Revenue from our largest customers continues to expand. First quarter, trailing 12-month revenue from our top 20 customers, increased 55% year-over-year to $108 million per customer.

Now moving to our commercial segment. First quarter commercial revenue grew 95% year-over-year and 14% sequentially to $774 million. We closed $1.3 billion in commercial TCE bookings in the first quarter, representing 42% growth year-over-year. Our AI platform dominates U.S. markets as the only real choice for deploying AI models operationally in a way that actually works. First quarter U.S. commercial revenue grew 133% year-over-year and 18% sequentially to $595 million. This exceptional growth even understates our U.S. commercial momentum. As Ryan noted, we had a successful U.S. commercial customer program transition to a U.S. government customer. Absent this transition, U.S. commercial growth would have been 143% year-over-year and 22% sequentially. In Q1, we closed our third consecutive quarter of over $1 billion in U.S. commercial TCV bookings at $1.2 billion, representing growth of 45% year-over-year. Over the past 12 months, we closed $4.7 billion of U.S. commercial TCV bookings, a 115% increase from the prior 12 months, highlighting the accelerating demand for AI that creates real operational value.

Total remaining deal value in our U.S. commercial business grew 112% year-over-year and 12% sequentially. Our U.S. commercial customer count grew to 615 customers, reflecting growth of 42% year-over-year and 8% sequentially. First quarter international commercial revenue grew 26% year-over-year and 5% sequentially to $179 million. Revenue from strategic commercial contracts was $3 million for the quarter, representing 0.2% of overall revenue. We expect revenue from these contracts to be less than half a million dollars in each remaining quarter of this year.

Shifting to our government segment. First quarter government revenue grew 76% year-over-year and 18% sequentially to $858 million. First quarter U.S. government revenue grew 84% year-over-year and 21% sequentially to $687 million. This growth was driven by continued execution in existing programs and new awards reflecting the growing demand for AI platform in government. First quarter international government revenue grew 51% year-over-year and 7% sequentially to $172 million. We closed $2.4 billion of TCV bookings, up 61% year-over-year. On a dollar-weighted duration basis, TCV bookings grew 135% year-over-year. Net dollar retention was 150%, an increase of 1,100 basis points from last quarter. The increase was driven both by expansions at existing customers and new customers acquired in Q1 of last year as load-bearing institutions continue to turn to Palantir's battle-tested AI platform.

As net dollar retention does not include revenue from new customers that were acquired in the past 12 months, it does not yet fully capture the acceleration and velocity in our U.S. business over the past year. We ended the first quarter with $11.8 billion in total remaining deal value, an increase of 98% year-over-year and 6% sequentially, and $4.5 billion in remaining performance obligations, an increase of 134% year-over-year and 9% sequentially.

As a reminder, RPO is primarily comprised of our commercial business, as it does not take into account contracts with an initial term of less than 12 months and contractual obligations that fall beyond termination for convenience causes, both of which are common in most of our government business.

Turning to margin and expense. Adjusted gross margin, which excludes stock-based compensation expense, was 88% for the quarter. Adjusted income from operations, which excludes stock-based compensation expense and related employer payroll taxes, was $984 million in the quarter, representing an adjusted operating margin of 60%. Q1 adjusted expense was $649 million, of 7% sequentially and 32% year-over-year, primarily driven by the continued investment in our AI platform and technical hiring. We continue to expect expenses to ramp in 2026 as we remain committed to investing in the product pipeline and the most elite technical talent, all while delivering on our goals of sustained GAAP profitability.

GAAP net income was $871 million, representing a 53% margin. First quarter stock-based compensation expense was $202 million, and equity-related employer payroll tax expense was $28 million. First quarter gap earnings per share was $0.34. First quarter adjusted earnings per share was $0.33. Additionally, our combined revenue growth and adjusted operating margin accelerated to 145% in the first quarter, an 18-point increase to our Rule of 40 score from the prior quarter, and our 11th consecutive quarter of an expanding Rule of 40 score. With our 2026 revenue and adjusted operating income guidance, we are guiding to a Rule of Forty score of 129% for the full year.

Turning to our cash flow. In the first quarter, we generated $899 million in cash flow operations and $925 million in adjusted free cash flow, representing margins of 55% and 57%, respectively. We ended the quarter with $8 billion in cash, cash equivalents, and short-term U.S. Treasury securities.

Now, turning to our outlook. For Q2, 2026, we expect revenue of between 1.797 and 1.801 billion and adjusted income from operations of between 1.063 and 1.067 billion. For full year 2026, we're raising our revenue guidance to between 7.650 and 7.662 billion. We're raising our U.S. commercial revenue guidance to an excess of 3.224 billion, representing a growth rate of at least 120%. We are raising our adjusted income from operations guidance to between 4.440 and 4.452 billion. We are raising our adjusted free cash flow guidance to between 4.2 and 4.4 billion. And we continue to expect GAAP operating income and net income in each quarter of this year.

With that, I'll turn it over to Alex for a few remarks and then on a look at the Q&A.

Alex (Title): Well, welcome to yet another exciting earnings call. With these numbers, the ones that leap out to everyone are the over 100% growth in the U.S., the rule of 145, the 85% growth in the U.S., and guiding to 71%. And just the underlying dynamics of that, you would think that the most interesting thing is just the truly end of one nature of these numbers. And in fact, it is pretty fascinating, especially people who've doubted that we get this far. But I think the most important thing about our earnings is it establishes beyond a doubt that while over the history of Palantir, we focused on things that actually transformed the world. The current environment is actually being transformed by the Palantir platform. And although there's a wide view out there in the world that AI slop is going to take over the world, our clients especially, primordial infrastructure industries. No, this is not the case. They buy our product despite the fact we have 70 salespeople. A normal company of our size would have 7,000. Only seven of our salespeople actually even really sell. We are doing what a normal company would do with 7,000 salespeople with seven people. We're doubling the U.S. We are dominating on the battlefield.

Sean will talk about this later. But the way... opposed in a contradiction to both allies and friends and enemies, is being done in our platform from beginning to end across the US. The reality that we will be able to drive 100% growth in the US is being driven by the fact that our customers either know or will know that you need actual results. Those results require granularity, specificity, actual relationship to facts. The appearance of software working is not software working. And it's the slop that is getting a lot of attention is not only dangerous in terms of the hyperbolic rhetoric that also, like, there will be no jobs because of the slop. Nothing will work. We will have a godlike figure in the name of AI. When, in fact, what actually does work is a platform built by a motley crew of highly technical people who, over 20 years, have been maligned for being right about the nature of having to build Foundry, the nature of having to build Apollo, the nature of an FDA. And that... And the demand for this is once in a lifetime. And that demand is actually driving these financials, meaning growing 71% goal for the year.

What did we miss? Okay. Any case... I hope you guys got that. Wow, this is like being on stage. Yes, so with that, maybe we'll go to questions. But the unique way in which this company is being run, the unique way in which the way we built the products, the unique way in which we're willing to be non-mimetic. When the whole world said software had to be worthless, we built platforms that worked. When the whole world said you could not extend it with FDEs, we went and built FDEs. When the whole world is saying AI swapped without an ontology that allows you to put true statements and truths into the ontology and therefore produce actual results, we stuck to our guns. And what did we get? We got these results. And I think if you just look at the results, how can a company grow 100% in the U.S. with functionally a non-existent sales force with the same number of people? Our free cash flow this quarter is larger than our revenue a year ago in the same quarter. Think about that. Same company, same people, extenuated products. It's all being extended.

And then look at the impact on the battlefield in the Middle East. on every government institution, on demand of our product, and in U.S. commercial. This is all the result of being right about product, right about execution, and standing in the headwinds of people who are certain they're right. Now the new version is AI swap and proving that they're wrong with our results. This is an incredible quarter, and I'm very proud of this.

Analyst (Firm): Well, thanks Aiden for the question. Well, it's a massive tailwind for us because we've always been counter-positioned against this sort of legacy thin software, you know, that kind of was built by and execute a playbook that's built around rent extraction and no outcome delivery. We, on the other hand, have been focused entirely on building software that's focused on alpha and not beta. We're not trying to make you the same as every other person. We're trying to figure out what makes you different, how do we express your business strategy through the software platforms and products we build. So that part is probably obvious, that counterpositioning. But the other counterpositioning is against AI slop. We are focused on enterprise autonomy, not on dazzling demos. We have in the ontology the no-slop zone. The ontology is the body to the AI brains. You can't actually interact with the enterprise or affect the world. Your agents can go nowhere without ontology. And you're seeing that with our customers. In government, we are the platform that you build applications and agents on. In the commercial world, people are replacing legacy software at a lightning fast pace, as I mentioned in my remarks. And we see that even internally at Palantir where we've gotten rid of legacy software like CRM, built it very quickly on top of our platform to a user experience that our users love.

You know, almost every single highlighted example of AI that actually is producing results in the U.S. is actually Palantir by Palantir. One of the ways to pen test what we're saying is just dig into the examples of AI actually transforming an enterprise. Call the client talk to them I'm not saying every single one is but almost every single one is and it's and it is because the theory of what how you do ai and the practice and the enterprise are just radically different and they look the same to non-technical people but they do not look the same to practitioners whether you're on the battlefield or whether you're an insurance company or whether you're a hospital or whether you're a manufacturer. What they discover is the reality of doing this requires a platform like Ontology and currently executed on top of Foundry with FTEs. And currently that combination is available from one company, and that is us. Thank you.

Dan (Wedbush):

Our next question is from Dan with Wedbush. Dan, please turn on your camera, and then you'll receive a prompt to unmute your line. Yes. Yeah, thank you. Well, great quarter yet again. But my question is, how do you balance between going after government deals and then commercial deals? Because obviously, you know, you're in a unique position, just like we saw with that deal this quarter. Can you talk about that balance? Because obviously, there's more demand and supply in terms of relative, in terms of pound tier. Thanks.

Ryan (Title): Maybe we'll talk to Ryan. So the reality of how Palantir works is we position and prioritize the U.S. warfighters over everything else. And when we believe or know because of our proximity that the U.S. warfighter is in danger, we put the whole company against it. And it is not always the way in which one should do this, but it is how we do it. And we've done this from the beginning and we're doing it now. And so in the current context, we take opportunities that look the same from a business perspective. And we 100% prioritize this nation's security over any other variable. That also, interestingly, gives us leverage because we go to the government and one thing people don't believe is we're like, look, this doesn't work the way you think or this kind of execution will not lead to success. And you are actually asking us to take money out of our pocket to do it, which we will do. But we cannot sign up to do something that won't work, that will not advance the warfighter, that will not advance munitions, that will not help this country have better unit economics while just hurting or deprioritizing another client.

By the way, we tell commercial clients this. I tell commercial clients this all the time. We are highly monogamous clients in the way we work. We are not trying to make you into a commodity. The only thing we will put above you is the U.S. national security. And, by the way, we're more than willing to do this when it is unpopular or when it's popular. And that's, if you look at the retention and the full alignment inside Palantir, the benefit of this is we just attract and retain people that understand there's a higher value than just running the business as a business. That said, our biggest problem currently is demand in the U.S. I believe we will have 100% growth in the U.S., is that we just cannot meet demand. And, again, the advantage here is we can go to commercial and government clients and say, look, this doesn't make sense. If you want slop, you can go here. If you want old school software that actually doesn't work and probably will disappear, there are a lot of names. If you want us, we need to do it in a way that will make sense. And that gives us a lot of leverage. But we're very upfront with people. We're just like with our customers and just like we are internally. And... And we're also doing this abroad. You know, one of the reasons why we're intolerant of software and AI or some kind of witchcraft dance that you have in some parts of continental Europe is we have no time for it. We literally have no time or no energy for the waste of time machine.

Probably I should be on TV explaining to people why the models are actually only useful on a platform, why the use cases platform companies are talking about are actually in Palantir, why the cost and token reduction token price is exactly what we predicted, why our clients actually are asking, can I have a cheaper model since they seem pretty similar? But we also don't have a lot of time for that. Would you like to add to this now that we're on the mic?

Management: I'll just say, yeah, what we're seeing across our customers, and this is what's driving the U.S. generally, is those that understand the load-bearing context. In order to apply AI in that context, you need to be able to deploy it with precision, without flop. And you see, like, the AIG CEO talking about the agentic underwriting and claims process that's being coordinated through the ontology. These are all really massive undertakings. We're going deep with our customers, and we're having that level of impact, and that's what really is driving us.

Mariana (Bank of America):

Our next question is from Mariana with Bank of America. Mariana, please turn on your camera, and you'll receive a prompt to unmute your line. Hello, everyone. I hope you guys hear me. I don't know if you are going to be able to see me. I'm going to start off this little while. I'm going to do three questions today. Number one, When AI started, you guys, you have some customers that wanted to do it their way. And what's happening right now with the AI labs getting into enterprises? Like how many customers understand that value? Or how many are the niche customers that like understand it and are actually advancing faster? But you also have some that are still like just, I don't know, trying with just Amtropic, Gemini, like OpenAI. They all have enterprise solutions now.

Alex, you mentioned talent. How easy or hard is it actually to get the right engineers to keep being able to incorporate all that to the outcomes that we are looking for? And the second one on defense, because it's where my heart is always... You got a good call-out on Maven in the presidential budget request. Maven is one of the two pillars for .C2. Titan is moving to production, and that is amazing news, but this is an election year. How much of that growth depends on that budget being appropriated and how much you can actually keep growing if we were to see an extended continual resolution?

Management: Well, the talent question is the Palantir is famous for having the best talent over a very long period of time. It's a super competitive environment. I think most the whole world wants to either work a Palantir or a lab. The advantage that we have at Palantir is if you come to Palantir, you learn how to build something that is truly unique. And quite frankly, if you want to leave Palantir, you can have any job in the world. And so I think that talent race is going to continue. The thing about being at Palantir is it's a very high pressure, very unique environment where we need people who are willing to do things that are different than anyone else. And where, although we're nine-tenths of the world loves us, one-tenth of the world professionally hates us. So someone on your social graph is definitely going to call you up and say, how can you do all this important work in Israel or the Department of War or other places? even though we've powered every administration basically since in existence, not at this scale, obviously.

So that's an ongoing thing. I am pretty confident that we will continue to attract and retain some of the best talent in the world, and we're seeing a ramp up in that. I am now personally sitting across recruiting. I'm particularly interested in neurodivergent people of all kinds. People who are neurodivergent enough that they get up and come to this country and do important, valuable work. And we see a lot of, yeah, and so like we're really, we find a lot of our allies have chosen to come to America and chosen to come to Palantir. We like that. But it is an ongoing battle. There really are a couple options in the world that make sense. Palantir is obviously one of them. And we're very, very unique countries. I would also say the more we produce these numbers and the more we have actual experience on the battlefield in an enterprise, one of the things we're going to do an increasingly frontal job of doing is you can join the startup that probably is not going anywhere. Everyone kind of on the inside knows venture is kind of not doing well. Or you could come to Pound. But it is an ongoing, everyday battle. Everybody wants a Palantirian.

When we started this, I mean, a couple years ago, I was saying Palantir is the most important degree in the world. The problem for us is it is the most important degree in the world, and everyone knows it now. Thanks also because we got fair coverage and because, you know, I mean, we probably are, because of our domination here, somewhat undervalued. But people know that we actually are changing the world, and we're probably somewhat undervalued, so it's a great place to go.

On the defense side, I'll leave it to Sean to talk now that we're doing our...

Sean (Title): Yeah, on the defense side, it's been a very active period. It's not just Maven and Titan. There's also the work that we're doing on production across major weapon systems for the department, work around the Sputnik moment right now. So there's a lot going on that one should be pretty excited about. The department's pulling as much of that into 26 as possible. History will suggest, of course, we're going to be in a CR because most time since Palantir's existed, there's always been a CR. So there are certain things that are outside of our control, but I feel very good that the role we're playing, the stakes are very high. What we're providing is existential to actually moving the department forward, and we'll realize that value.

On the AI lab side, the enterprise side here, you know, I think one of the privileged positions we live in is at the limits of what the models can do. I think one of the challenges for the labs is that all they see are the limitless potential as opposed to living at the edge of where does it translate into economic value. And you see that with, you know, I wish everyone the best with building out deploy code, but it's essentially how do I take Palantir and try to replicate that. What we do is very unique based on how we've organized ourselves and the tension between FD and product development. And we have these out-of-body experiences. There's at least two labs we can think about where they were talking about two different customers that they're working with and how it's transformed X or Y. Yeah, it did in AIP. We did that.

I just add to that point. The best thing that can happen to this company and maybe this country is, you know, of course they should go out and flirt with all this slop. Mostly they come home to pound here. They don't have to all come home to pound here. We have limits. But go test it out. Go see how easy it is. I mean, they're creating the market for us. Easy it is to make these things work. Great. And then compare what you're delivering to what we're delivering. You know what? My version is we don't have to have all the market. We are at our limit doing 100% this year, which I am going to drive the company to, and maybe we can do 100% next year in the U.S. You know? That's all we can do. You know, and they can just expose the market to their beautiful, shiny appearances. And we'll just expose the market to how we will transform your enterprise. That's how it's going to go down.

And by the way, I'm always telling people inside the company, everybody wants to be you. You just may not know it. They're all trying to do Polico, Stoico, Disco. It's because in the end of the day, they need to have growth with profit. But you can't have profit if you're not changing the dynamics of the partner you work with, meaning your customer. It is downstream from the value you create, and that's how Palantir did it. We're very comfortable in that zone. Now, I do think this is going to be, we're going to end up with a different term for software. You can't lump what we're doing. We're really providing infrastructure and installation of AI infrastructure. Look, if your company is largely running around and offering steak dinners with something that someone can, you know, hack and rebuild in a week, yes, you're going to have a huge profit. That don't make sense. They're under huge pressure. And that's one of the reasons we're at the forefront. I mean, can you believe we're at the forefront of almost every discussion in the world? And it's simply because we're powering almost everything that works. Not everything. There's some other great companies out there. Many of them are not well known and we should help publicize them. And that's where we're at. And that's what these numbers show. You don't have to believe us. Believe your non-lying eyes.

Alex (Title): Thank you. Alex, as always, we have a lot of individual investors on the line. Is there anything you'd like to say before we end the call?

Alex (Title): Well, to individual investors and Palantirians who are also individual investors, being on the front line of important things is painful. You get yelled at occasionally. Many of the people yelling at you have no clue what they're saying. Some of the people do have a clue what they're saying and just disagree with the West being strong and more efficient and more moral and having better unit in economics or, quite frankly, are... We value your support, and we value your defense of us. We are defending you every day, every day, and that's in great part what drives these results. And we are having some fun doing it too, just so you know. And hopefully you'll have some fun. Thank you for your support, and we will see you next quarter.

Management: That concludes Q&A for today's call.

Q4 2025 Earnings Call — February 1, 2026

ry of our own, and we are doing things unlike any other company has done, which has, of course, been confounding to people over the years because they said we were a services company when we were doing FTEs. They said that our products were not good. were somehow merely software. In fact, they're implementation orchestration machines. And no one thought we'd be able to generate this kind of revenue while having an anemic and declining sales force. And this obviously has import for the world. And what does it mean for the world? Well, it means that, first of all, that the way in which we view value is obviously no longer relevant. That the bottom of the stack somehow is where the value is lessened and the top of the stack where we impregnate the world with AI, with ontology and FDA and tribal knowledge as represented at this table is actually where the value is created. And that value is so large and so disproportionate that you can create a company that seemingly is exploding in terms of growth and quality of growth.

It also means the riff we've been saying for years that it's chips and ontology, meaning investing purely in commodity products, LLMs that are not orchestrated, Of course, it not only ruins the unit economics of your business, but it also provides the market with a very distorted view of what value creation would mean. Because obviously, if you're making revenue with no way of making profit because the cost of it is so high, that's not valuable. If you're producing something that is the same thing everyone else is producing, it's obviously of de minimis or no value. So we've inverted the stack. We've proven that the investment in what we've done with small numbers can have disproportionate impact both on top and bottom line. And we've also seen, unfortunately, that there's a real hesitance to adopt these kind of products in the West, outside of America. And the two places leading here are China and America. And what we're seeing in America is so widely divergent. And so the non-adopters, the have-nots, are hoping for a KESSUP function. But these numbers are a breakout function. With these numbers, you have broken through to a new category.

It is not the category – the basket of category of AI is actually meaningless. It's the basket of category of performant value creation with the tools we have at hand, of which AI is crucial. And to believe you can go and build companies without this is supremely dangerous. And we're going to see over the next year Companies that adopt things that actually work, we know ontology FDA orchestration is explosive and revolutionary. And obviously companies cannot be expected to perform at this level. truly historic. But how do you even perform at half this level is going to be a real question for tech companies and a real question for countries. Can we produce companies that are producing what we produce in a quarter in a year? And one of the things we've got to figure out in the West is how do we do this? And this is putting enormous political pressure on our institutions because obviously political leaders struggle with how do I provide value when there's a disproportion have and have not. Now, in the Palantir version, the haves are the workers and the people that know how to actually use these products. And the ground truth of this is so far away from what people intuitively believe.

It's actually not the capitalists against the workers. It's the capitalists and the workers. But that's very confounding to political leaders. And it's confounding to structures that don't know how to adopt this and cultures that are not producing these kind of products. Last not least, these numbers are extraordinary because they're fully organic. They're not just organic because we don't do acquisitions. We don't do acquisitions because we are a thick, dense culture. which means you'd have to fit in. And we have the perfect excuse now of not being able to do them because no one has numbers like this, and it would reduce our numbers to do acquisitions. But they're also fully organic in the sense that we have no intertwined economics. Palantir has direct relationships with our clients in defense, intel, and commercial clients. We are not co-investing. We are not investing in commodity products. The numbers are pure. The purity of the Palantir enterprise and the courage of the enterprise – And we have lots of debates internally about what we should do, how we should do it.

But from the beginning, we have stuck to our very strong values of expanding what we believe is the noble side of the West, which means being lethal on the front end, meaning outside against adversaries if necessary. Hopefully adversaries do not want to mess with us. And on the inside, meaning... domestic institutions, intelligence institutions, essentially taking an incantation of the Fourth Amendment, which is completely represented by our pipelining foundry and impregnating institutions with it so that every institution that uses our product is doing it within conformity of the law and the ethics of America and hopefully a logical extension of those around the world. Thank you. Thanks, Alex. We'll now turn to questions from our shareholders before opening up the call. We received a question from Jeff Jay who asks, how are you thinking about your international business? Do you anticipate re-acceleration in the near future, for instance, due to European rearmament? Well, Shyam and Ryan should comment on this. But one of the big difficulties outside of America, including the Allies, is, and again, as these numbers show, it's not how much you spend, it's with whom.

And so we're currently, first of all, Palantir is in a unique position where we really don't have the bandwidth to do anything that's difficult outside of America. And as this learning curve goes on, it's more and more difficult to help people understand how to implement these things. And the demand in the U.S. is so great. But the core issue for our allies is going to be can we get to a point where there's a clear recognition that you're going to have to buy products that are much, much more advanced than what is being built domestically. And that's complicated for them because they tend to want to buy products for themselves.

But if you just go back to a wider frame, Is this institution load-bearing? is the purchasing structure of a European country actually allowed to bear the load of buying the best product? Can they understand the delta in a way that allows them to make a decision that might go against the narrow economics of their own country? And I think, unfortunately, what you see is you see in the Arab and non-Arab Middle East, so Arab countries and Israel, you see adoption, you see wide-scale adoption in China, and you see a lack of adoption in Canada, Northern Europe. and in Europe in general. But the real difficulty for the world is, you know, if Palantir is going to bear a lot of the weight of this work, We are scaling. I mean, Sean should talk about this, but like the demands on our product in the U.S. government in defense and civil are extraordinary. So how do you in fact even justify moving into something that's more complicated as a real issue? And again, but the issue ends up being their issue more than our issue.

I think one of the things you're going to see in Northern Europe, Canada and other places is a real pressure to move to the left and right politically very far because The way you deal with this, when you don't have an answer to the question, you come up with ideologies that make no sense, and you try to implement them. And that's the pressure they're going to have. The pressure we're going to have as a company, as a country, is how do we actually service the demand at the unyielding level of quality that we demand from ourselves? And, you know, the bar at Palantir is not we're the best. It's that it's got to be magical. We're not in the business of delivering the best products. We're in the business of delivering magically projects that are magical on the front line. And we, unfortunately, can't talk about some of that, but we've seen that in the last year, magical implementations that have actually changed how people view U.S. deterrence. Obviously, the primary heroes here are the warfighters. But, you know, the implementation orchestration which Sham and many, many people at Palantir have spent tireless nights working on has actually changed what people are able to do.

If you have any questions about this, you can actually go – if you speak or read French, go into the French newspapers. One of the countries that has the clearest idea of the problem is France. But they don't really know how to solve it because solution involves buying American products, particularly Palantir. Nothing to add to that. That's great. Thanks, Alex.

Our next question is from Mariana with Bank of America. Mariana, please turn on your camera, and then you'll receive a prompt to unmute your line. Good afternoon, everyone. Can you hear me? So two questions as usual, one in the commercial side, the other one on defense. On the commercial side, the markets have already decided that 2026 is the show me story for AI. Have you seen that in the customers or software partners? Like you talk about this, I think you call it hesitancy, but like Over time, you have talked about this resistance from some corporates to implement AI the way you thought it was the right way. Have you seen a change in that dynamic? The other one is related to SHIP OS. Shipbuilding has not been the only thing that the Pentagon has struggled to ramp up. There is a major effort to reindustrialize the U.S., and especially the military-related stuff. But, like, is there an opportunity to have, like, I don't know, an ammo OS or a missile OS? And, like, where else we could see that applied? Yeah. So I would say our whole commercial go-to-market strategy is showing and actually delivering value impact to our customers directly as quickly as possible.

And that's where we're seeing the stories of customers that are starting at larger sizes and expanding more quickly. We closed, you know, in our overall business, we closed 61 deals over $10 million. That's because of the impact that we're delivering to customers, and the customers are excited. I'm having a lot of those conversations with those customers, and it's all because we're showing them what we can do with the software, and we're showing the impact, and we're the only one that's delivering that leveraged impact from the models with the ontology, with the FD, with our products in those organizations. Again, here you'd have to disambiguate America from all other markets, but in the American market, We have inbounds where people have already seen proof points at other companies and not on one use case. It will be like migration of this kind of product, underwriting, a myriad of use cases. The conversation two years ago was much more I've heard you're kind of this weird thing that might be able to make it work. In general, the conversation now is I've heard you've made this work. I don't understand where you fit into a slot.

The reality of Palantir is we're not a one-slot company. So it's like if you want to view us, what people know us for is it will work, and it will work really well, and it will be very quick. And then, but a lot of our customers come now with, I know it'll work. What do I need to do to make this accelerate? And then on the end where it's like not as positive, it might be, you know, I don't quite understand how this would work or why this would work. But there's a lot less of that. And quite frankly, we're in a much better position to shape who we work with than we've ever been. And part of what we're doing, quite frankly, is shaping who we work with. Because, you know, like, Ryan is sitting on one of the more interesting deployments, both technically and commercially. And the person running that deployment on their end, de facto, is the CEO. And they're very far in the weeds. And it's like, and they're, like, they've reshaped their org to absorb our product. And, like, we've never had anything like, and it's the same thing, Shams, you talk about this in the D&D, but it's not.

One of the unusual things that, unfortunately, we can't talk about is also just how much we can shape what's going on under the hood, including, like, how do you orchestrate something in a defense or civilian context? And it's not that we're the deciders, but it is the first time that, you know, we can help shape the footprint against which we execute. Not in all cases, but for the first time in many. we need to get done this year is to expand that. It's much more density of client base than volume. We're into transforming large institutions and then making a lot of money with them. It's very counterintuitive, but because of that, they see very deep alignment and they're willing to listen to us when we say, yeah, we know that won't work. Like in the past, we had to show them it won't work. Now a lot of our conversations are, look, we know this won't work. Everyone thinks this will work. This is some BS that companies tell you. It's never going to work. If you want the event planning and the steak dinner, you can have that. And quite frankly, some companies are like, yeah, we have some part of our company that's not real.

We'll use some other company that does event planning and steak dinners for that. And then we're part of the real part of the business. And on defense and reindustrialization, obviously, reindustrialization is something we've been talking about for the better part of two or three years now. It's something we're very focused on. It starts in defense, but I think it goes to pharmaceuticals. It goes to chain reaction where we're helping build data centers. So, like, there's so much activity there that we're uniquely positioned to go after. Shyam's being overly modest. Shyam's phone rings off the hook all day, and what they want from him is, how do I do this same thing across government? That's literally what's happening. And that's what it is. The ship OS, of course, we're starting with the sub fleet, but people are asking us to help with all sorts of different weapon systems, fighters, bombers, surface vessels, drones, weapons themselves, munitions. And it's a big area for us that spans not only the production of the weapon, but also sustainment of them.

And if you think about lethality, the ability to deliver combat power you need an integrated ability to do this from the factory floor to the foxhole. And MAVEN is a huge investment that has changed how we fight across the joint force on the foxhole side. And what we're doing that Chip OS is really the kernel of and is powered by Warp Speed is how we're going to reinvigorate the factory floor and provide an integrated view to the Pentagon through this.

Thank you.

Our next question is from Dan with Wedbush. Dan, please turn on your camera, and then you'll receive a prompt to unmute your line. Yeah. Yeah, so great to see you again. And, look, obviously a phenomenal quarter. My question is, does it feel like you're getting more and more of the budgets on the commercial, as well as even on the government defense side, where you go in to do X and all of a sudden instead you're doing Y? Is that starting to happen now? You're just getting a bigger and bigger piece of these budgets when Palantir comes in? Well, if you look at You look at our numbers very closely. What you will see is inexplicable growth in revenue, but not inexplicable growth in customers. And it's inexplicable growth in revenue because customers that are serious are putting a lot of their most important problems in our hands. And then the value creation, we're downstream from that, but the value creation is so large that So it's both, you know, it's not just that you get more problems. It's that you solve them in a way that is determinative for the business, and then they pay you a lot more.

And then there's also just this consensus, right or wrong, that the alternatives to us are not great. You know, it's like, you know, I'm constantly, before these calls, I get 50 texts, could you please be more modest? And it's an issue. But we struggle. We all struggle with something. But the thing is, I think the true answers to this, it's not like I don't understand this false modesty of like the customers we work with know that we know things other people don't. And we've been sticking to the way we do things for a long time. And now AI has just put gasoline on all this tribal knowledge we have in our products. And I would say, you know, and then we're much better at actually, I wouldn't say being modest, but saying you may be a customer or a country that's not getting this right now, like Western Europe. I'm very pro-Western Europe. I've been admonishing Germany in German to, like, wake up because I care, not for commercial reasons. But the reality is most people there are not ready. So it's like we're in a position to say, yes, you understand what we can do, and this is how it would work.

The best examples are in all the stuff Sham is doing and other people are doing in government. which cannot be talked about, but the initial discussions are like, well, how would you shape the problem? No one's, you know, it's like that's what people want from us. Because, like, our weapons software is in every combat situation I'm aware of now. Maybe the more people with higher clearances are aware of some things we're not involved in. And people say, well, this should not have worked, and it did. And then on the commercial side, which is, I think, of great interest to investors, I mean, that's why we have, you know, these – that's why we have a rule of 127. That's why we're growing 93 percent in the U.S. That's why our guidance is at 61 percent. It was at 31 percent last year at the beginning of the year, something like that. So it's like – it's because we have a very tethered and deep and dense proximate relationship with investors. the leaders in almost every field of industry. And last, adjacent to your question, but it's like, and these relationships are not circular pay relationships in any way. It's like, we provide value.

I tell, I mean, not that it comes up very much, but I used to tell people all the time, just imagine we're a Swiss company, but, you know, we have to pay us a little. We're like, we deliver a high value product. We don't want any BS about getting paid. We're not going to give you any BS about why our product didn't work. and offer you a steak dinner or an event planning event. We're going to deliver and then we get paid. And we got paid last year. A lot. 127, 70, 93. Those are my favorite numbers. Thank you. Alex, as always, we have a lot of individual investors on the line. Is there anything you'd like to say before we end the call? You know, When we are thinking about what we're building, we are building these things with our internal culture, our defense clients, partners, and with a great thought to people who have put their own money into Palantir.

And it's just a very important part of why we continue to perform and what motivates a lot of us here and definitely me And I hope that you are having a great time when you run into professional analysts who thought we would never be free cash pro positive, we'd never be profitable, we'd never have a two-handle, a three-handle, a four-handle, a five-handle, and now a seven-handle on our aggregate growth. And the rule of 40 was some. unattainable category, although 127 is unattainable by everyone besides us. So I hope you're enjoying the ride. There's always ups and downs, and there are ups and downs for all of us. We've been doing this for a long time. But we're having fun tonight. I hope you are, too. And, yeah, congratulations. Thank you. That concludes Q&A for today's call.