Palantir hits $1 billion quarter milestone thanks to AI, says $1 trillion is the goal

Palantir has hit a new milestone with second-quarter revenue crossing $1 billion for the first time, and now the company says a $1 trillion valuation is where it’s headed next.

The Peter Thiel-owned company confirmed that revenue grew 48% year-over-year to reach $1.004 billion, powered by major growth in both U.S. commercial and government deals. The company also raised its full-year guidance across all key metrics, citing continued demand for its AI software.

CEO Alex Karp said, “We are guiding to the highest sequential quarterly revenue growth in our company’s history, representing 50% year-over-year growth. This was a phenomenal quarter. We continue to see the astonishing impact of AI leverage.”

Revenue from the U.S. surged 68% compared to the same quarter last year, landing at $733 million. U.S. commercial deals pulled in $306 million, up 93%, while U.S. government contracts generated $426 million, which was 53% higher than last year. Palantir’s Rule of 40 score also hit 94% in the quarter.

Palantir’s total contract value hit $2.27 billion, which is a 140% increase compared to the same time in 2024. U.S. commercial contracts made up $843 million of that total, surging 222% year-over-year. The company also reported that its remaining deal value from U.S. commercial accounts reached $2.79 billion, which is up 145% compared to last year and 20% higher than Q1.

Customer count grew 43% year-over-year and 10% quarter-over-quarter, showing Palantir’s growing market footprint. The company reported GAAP income from operations of $269 million, with a margin of 27%, while adjusted operating income came in at $464 million with a 46% margin. Net income hit $327 million, which gives it a 33% margin, while adjusted net income was $404 million.

Palantir also brought in $539 million in cash from operations and ended the quarter with $569 million in adjusted free cash flow. The company now holds $6 billion in cash, cash equivalents, and U.S. Treasury securities. Earnings per share stood at $0.13 GAAP and $0.16 adjusted. Adjusted EBITDA hit $470 million, giving a 47% margin.

Palantir raises full-year guidance as AI demand grows

For the third quarter, Palantir expects revenue to fall between $1.083 billion and $1.087 billion, and adjusted income from operations to range between $493 million and $497 million. For the full year, revenue guidance has been raised to between $4.142 billion and $4.150 billion.

Adjusted income from operations is now forecasted between $1.912 billion and $1.920 billion, and adjusted free cash flow is expected to come in between $1.8 billion and $2.0 billion.

In his shareholder letter, Alex said, “All the value in the market is going to go to chips and what we call ontology.” He pointed to the rapid combination of language models, chip capacity, and Palantir’s software as the reason the company passed the $1 billion mark this quarter.

He said this momentum came after years of investing in infrastructure and being dismissed by critics. “The skeptics are admittedly fewer now, having been defanged and bent into a kind of submission,” he added.

During the earnings call event, Alex told us that U.S. companies need to resist becoming bland compromises of global preferences. He then warned against what he called a shallow acceptance of all opinions, referencing C.S. Lewis’s 1943 book The Abolition of Man and its warning about “men without chests.”

“Such men promise to shepherd us forward yet lack much substance,” he said. “They are little more than administrative caretakers.”

Following the report and the earnings call, Palantir’s stock surged by more than 3% in extended trading, while stock futures reacted to its outstanding outperformance across major indexes. Dow Jones futures rose 74 points, or 0.2%, and S&P 500 and Nasdaq 100 futures each also rose 0.2%.

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