Palantir Technologies CEO Alex Karp poses with the company logo before an interview with Reuters in the Swiss mountain resort of Davos May 23, 2022. Photo taken May 23, 2022.
Arnd Wiegmann | Reuters
Palantir Technology raised its annual revenue forecast for the second time this year on Monday, the latest sign that the boom in generative AI is driving demand for the company’s software services.
Shares of the company rose more than 15% in extended trading.
The data analytics company also forecast higher-than-estimated third-quarter sales and reported its biggest-ever quarterly profit for the April-June period, CEO Alex Karp said in a letter to shareholders.
The company’s AI platform, used for testing, debugging code and evaluating AI-related scenarios, has allowed Palantir to tap into growing demand for services that help companies develop generative AI technology.
The company, co-founded by billionaire Peter Thiel, now expects annual revenue of $2.74 billion to $2.75 billion, up from its previous guidance of $2.68 billion to $2.69 billion. That forecast is higher than the $2.70 billion estimate, according to LSEG data.
The company also raised its annual revenue expectations from U.S.-based companies by $11 million, to $672 million.
Palantir is driving growth by helping companies overcome the “huge bottleneck” between AI application prototypes and finished products that can be deployed to customers, chief revenue officer Ryan Taylor told Reuters.
Shares of Palantir, which are up more than 39% in 2024, fell nearly 9% last week after earnings reports from major tech companies like Microsoft signaled that returns from big investments in AI could take longer than investors initially expected.
The company forecast third-quarter revenue of $697 million to $701 million, compared with analysts’ average estimate of $679.1 million, according to LSEG data.
The company is trying to reduce its reliance on government customers, which accounted for about 54% of total sales in the second quarter.
“For the first time in the company’s history, the trailing twelve-month revenue of the U.S. government business — which includes defense and intelligence agencies — exceeded $1 billion,” CEO Karp said in a letter to shareholders.
Palantir, which works closely with governments to provide military location visualization software and other services, saw its revenue from its companies grow 33% in the reported quarter.
