Palantir Just Delivered Another Quarterly Beat -- And the Company's 2026 Outlook Just Got Even Stronger

Palantir (NASDAQ: PLTR) published its first-quarter results and added to an impressive track record of delivering beat-and-raise reports. The business recorded non-GAAP (adjusted) earnings per share of $0.33 on sales of $1.63 billion in the quarter. For comparison, the average analyst estimate had targeted adjusted earnings per share of $0.28 on sales of $1.54 billion.

Palantir's net income surged from $214 million in last year's first quarter to $870.5 million in this year's period, and revenue grew 85% year over year. The business's revenue growth has continued to expand at an impressive clip even as the overall size of the business has increased substantially, and strong demand trends among both public-sector and private-sector customers have been translating into incredible sales and earnings growth.

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Palantir's growth continued to accelerate in Q1

With sales increasing 85% compared to their level in Q1 last year, Palantir's revenue-growth rate accelerated substantially over the 39% sales growth it posted in the prior-year quarter. Sales growth also accelerated from the 70% year-over-year revenue increase recorded by the business in last year's fourth quarter.

Growth among U.S. commercial customers surged 133% year over year in Q1, and sales growth among U.S. government customers came in at 84%. Overall sales to U.S. customers were up 104% year over year to reach $1.282 billion. Even better, it looks like strong growth among domestic customers is poised to continue in the near term. Palantir reported remaining deal value among U.S. customers of $4.92 billion at the end of Q1 -- up 112% year over year and 12% on a sequential quarterly basis.

In addition to very strong sales growth in Q1, Palantir continued to book stellar margins. The company recorded adjusted operating income of $984 million -- good for a margin of 60%. Meanwhile, GAAP net income for the period came in at $871 million -- representing 53% of total revenue in the period. The artificial intelligence (AI) software leader's Q1 report continued to show that the business is seeing high levels of demand powering huge sales growth and best-in-class margins, helping to deliver rapid earnings growth.

Can Palantir keep winning?

Along with Q1 results that beat Wall Street's expectations, Palantir also issued forward guidance worth getting excited about. Management said that it was targeting sales of roughly $1.8 billion this quarter, coming in significantly above the previous average analyst estimate's call for sales of roughly $1.68 billion. The company's update to full-year guidance looked even better.

Palantir is now guiding for full-year sales to come in between $7.65 billion and $7.66 billion. For reference, the average analyst estimate had called for sales of roughly $7.27 billion prior to the company's guidance update. Given Palantir's track record of surpassing its own forecasts, it wouldn't be surprising to see the company post sales this year that meaningfully exceed its guidance range.

What about the valuation profile?

With the company's market capitalization sitting at roughly $350 billion as of this writing, Palantir has one of the most growth-dependent valuations of any major tech stock. Prior to subsequent valuation moves following the company's Q1 earnings report and guidance update, the company was valued at approximately 48 times this year's expected sales and 146.5 times this year's expected earnings.

While Palantir trades at a highly growth-dependent valuation, the company's impressive sales momentum and stellar margins profile suggest the stock could still deliver strong returns for long-term shareholders.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.