Takeaways by Saasverse AI
- $1.18B Revenue (+63%) | $475.6M Net Income (+212%) | FY Revenue Guidance Raised to $4.4B.
- AI-Driven Growth: U.S. commercial revenue soared 121% YoY to $397M; government revenue hit $486M (+52% YoY).
- Key Highlights: Signed $2.76B in Total Contract Value (+151% YoY); share price fell 3% post-earnings despite YTD +170% growth.
Palantir Technologies delivered record-breaking financial performance in Q3 2025, reporting $1.18 billion in revenue, a 63% year-over-year (YoY) increase that exceeded Wall Street's expectations. Net income surged to $475.6 million, reflecting a remarkable 212% YoY growth, underscoring the company's operational efficiency in scaling its AI and data analytics platforms. Palantir also revised its full-year revenue guidance upward to $4.4 billion, citing robust demand for its AI capabilities across both commercial and government sectors.
The company's U.S. commercial revenue was a standout performer, soaring 121% YoY to $397 million, driven by the widespread adoption of its AI-powered solutions. On the government side, revenue reached $486 million, marking a 52% YoY increase and highlighting Palantir’s deepening role in defense and public sector projects. CEO Alex Karp described this performance as the "best in the history of any software company" during the earnings call, attributing the growth to surging global demand for AI technologies and advanced data platforms.
Palantir’s strategic partnerships with tech giants such as Nvidia, Snowflake, and Lumen Technologies further fortified its market position, enabling the company to expand its commercial footprint. Additionally, the firm announced a collaboration with Poland, aimed at bolstering AI and cybersecurity capabilities, signaling its intent to penetrate the European market despite sluggish growth in the region.
New business activity remained robust, with the company signing 204 contracts valued at over $1 million each, including 53 contracts exceeding $10 million. The total contract value (TCV) for the quarter surged to $2.76 billion, a 151% increase from the prior year. However, despite these successes, Palantir's European operations continue to lag, an area the company will likely focus on improving.
The stock market reaction was mixed. While Palantir shares fell 3% in after-hours trading, they have already gained over 170% year-to-date, making it one of the top-performing stocks in the S&P 500. Analysts have expressed concerns over the lofty valuation, but Karp dismissed these critiques in his letter to shareholders, stating that Palantir’s growth has "confounded most financial analysts" and left skeptics "in a state of self-destructive bewilderment."
Looking ahead, Palantir provided an optimistic outlook for Q4 2025, forecasting $1.33 billion in revenue, far surpassing Wall Street’s consensus estimate of $1.19 billion. The company also raised its full-year free cash flow guidance to a range of $1.9 billion to $2.1 billion and expects U.S. commercial revenue growth to exceed 104% for the year.
Saasverse Insights
While concerns around valuation persist, Palantir’s strong execution, strategic partnerships, and dominance in AI-driven solutions position it as a key player in the AI and cloud ecosystem. Saasverse anticipates continued momentum as the company capitalizes on the accelerating global demand for AI technologies, particularly in defense and enterprise applications. The critical question remains whether Palantir can sustain this growth trajectory while addressing regional challenges and investor skepticism.