The short version
Palantir (PLTR) reported on Monday after the close, and the growth rate is the headline. Revenue of $2.313 billion, up 96% year on year and 20% sequentially. Both are its fastest since listing.
It beat on both lines. Earnings of $0.44 a share against about $0.41 expected, on revenue well ahead of the $2.18 billion forecast.
But the structural news matters more. For the first time, US commercial revenue overtook US government revenue.
- 💼 US commercial: $984 million, against about $925 million expected.
- 🏛️ US government: $953 million, against about $854 million expected.
The company most people think of as a government contractor now sells more to businesses than to the US government.
The profitability is unusual too. Net income of $1.128 billion, an adjusted operating margin of 62%, and adjusted free cash flow of $1.216 billion.
Guidance went up again. Full-year revenue is now guided to $8.530-8.534 billion, against about $8.21 billion expected, with US commercial revenue guided above $3.559 billion, a growth rate of at least 143%.
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What Palantir reported
- 💵 Revenue: $2.313 billion, up 96% year on year and 20% sequentially, its fastest growth since becoming a public company.
- 📊 Earnings: $0.44 a share, on both a reported and an adjusted basis, against about $0.41 expected.
- 💰 Net income: $1.128 billion.
- 📐 Adjusted operating margin: 62%.
- 🏦 Adjusted free cash flow: $1.216 billion.
- 🇺🇸 US business: $1.9 billion, up 119% year on year.
- 🧾 Adjusted expenses: $887 million, up 53% year on year, on AI platform investment and technical hiring.
And the outlook rose on every measure:
- 📈 Fourth-quarter revenue: $2.649-2.653 billion, against about $2.46 billion expected.
- 📈 Full-year revenue: $8.530-8.534 billion, against about $8.21 billion expected.
- 📈 Full-year US commercial revenue: above $3.559 billion, a growth rate of at least 143%.
- 📈 Full-year adjusted free cash flow: $4.8-5.0 billion.
Chief executive Alex Karp's characterisation, in a CNBC interview, was that he does not believe anyone has had consistent results like this in the history of software AI, and that the business is succeeding without salespeople. Those are his words about his own company.
What 96% growth at this size actually means
Growth rates normally fall as a company gets bigger. More revenue means a larger base to grow from, so the percentage shrinks even when the dollars increase.
Palantir did the opposite. Its growth rate accelerated to the highest level since it listed, at a revenue scale many times what it was then. That combination is rare.
Two things make it possible:
- 📦 Software scales. Serving an additional customer costs far less than serving the first, which is why the adjusted operating margin can sit at 62% while revenue nearly doubles.
- 🔁 Existing customers expand. Growth of this kind usually comes from current customers buying substantially more, rather than from an equivalent number of new logos.
The caveat is arithmetic. A 96% growth rate cannot continue indefinitely, and the company's own guidance implies a slower rate ahead. Guided fourth-quarter revenue of about $2.65 billion against this quarter's $2.31 billion is strong, and it is not another 20% sequential jump.
The crossover that reframes the company
US commercial revenue: $984 million. US government revenue: $953 million.
For the first time, Palantir sells more to American businesses than to the American government.
Why that changes how the company should be read:
- 🏷️ The label is now out of date. Palantir has been categorised as a government contractor for most of its public life. That description no longer fits the revenue.
- 📅 Government and commercial revenue behave differently. Public-sector contracts are typically long, large and slow to win, with procurement cycles measured in years. Commercial software sells faster, renews more often, and scales with a customer's own growth.
- ⚖️ It changes what the business is exposed to. A company dependent on government budgets is exposed to budget cycles. A company dependent on corporate software spending is exposed to the economy.
Neither exposure is better. They are just different, and an investor who bought this company as a defence-adjacent holding now owns something whose largest American segment is enterprise software.
It is the same lesson we found at Amazon, where AWS produced about 63% of operating profit from under a quarter of revenue. The headline description of a company and the part driving its results are frequently different things.
The question the numbers raise
Can commercial growth hold?
US commercial revenue is guided to grow at least 143% for the full year. That is the number to watch, for two reasons.
First, it is now the larger American segment, so it drives the group result more than government work does.
Second, it is the newer one. Government relationships at this company go back more than a decade. The commercial business is younger, growing from a smaller base, and has not yet been tested through a weak corporate spending environment.
That is not a criticism. It is simply the thing that has not been observed yet, and it is what the next few quarters will reveal.
What could go wrong
- 📉 The growth rate has to fall. 96% is not a sustainable run rate, and the company's own guidance implies deceleration. The question is how gracefully.
- 🏢 Commercial software is cyclical. Corporate technology budgets get cut in downturns, and the segment now carrying the company has not been through one at this scale.
- 💸 Costs are rising fast. Adjusted expenses grew 53% year on year on platform investment and hiring. That is a choice, and it is a growing one.
- 🤖 The competition is formidable. Enterprise AI software is being pursued by every large cloud provider, several of which we have written about this month.
- 📊 And expectations are extraordinary. This is one of the most discussed stocks in the market, and a company that beats and raises every quarter is judged against that record rather than against analyst forecasts.
PLTR is an example to research, not a recommendation.
What should investors take from this?
When a company's segments cross over, the description you carry in your head needs updating.
Palantir has been shorthand for government software for years. Its largest American segment is now commercial. Anyone still holding the old mental model is analysing a company that no longer exists in that form.
Three habits:
- 🔍 Read the segment table, which is where crossovers show up first. It is the same discipline that revealed AWS carrying most of Amazon's profit and Intel's foundry earning just $411 million externally.
- 📈 Watch growth rates, not just growth. Accelerating growth at scale is unusual and informative; decelerating growth from a high base is normal and often misread as failure.
- 🧺 And check what you already own. Fast-growing technology companies sit inside broad index funds, where the ten largest holdings are roughly 38% of the S&P 500.
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FAQs
What did Palantir report for Q3 2026? Revenue of $2.313 billion, up 96% year on year and 20% sequentially, its fastest growth since listing. Earnings were $0.44 a share against about $0.41 expected. Net income was $1.128 billion, adjusted operating margin was 62% and adjusted free cash flow was $1.216 billion.
Why is the commercial crossover significant? US commercial revenue reached $984 million against US government revenue of $953 million, the first time commercial has exceeded government. A company widely described as a government contractor now sells more to American businesses than to the US government.
Did Palantir raise guidance? Yes. Full-year revenue guidance rose to $8.530-8.534 billion against about $8.21 billion expected, with US commercial revenue guided above $3.559 billion, a growth rate of at least 143%, and adjusted free cash flow of $4.8-5.0 billion.
What does Palantir actually do? It builds software platforms that help large organisations bring together and analyse data from different systems. Its customers include both businesses and public-sector bodies.
Can I invest in Palantir from the UAE? Palantir trades on the Nasdaq under the ticker PLTR. On Nemo.money you can research and invest in eligible US-listed stocks and ETFs from $1 with zero commission, with uninvested cash earning 6% AER interest, paid daily in USD. PLTR is an example to research, not a recommendation. Your capital is at risk.
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