Palantir revenue jumps 93% as Karp hails “otherworldly” quarter, raises guidance
The scale of the U.S. commercial growth, up 149% year over year, is likely to draw the most attention from investors, since it points to accelerating enterprise adoption well beyond the government contracts that have historically anchored Palantir’s business. A Rule of 40 score of 155% is an unusually strong combined growth and profitability signal, and could reinforce bullish sentiment around the stock heading into the next quarter. The raised full-year guidance across revenue, operating income and free cash flow suggests management has high confidence in continued momentum, which may prompt analysts to revisit price targets. The framing around AI sovereignty as a differentiator, positioning the company against rivals whose models might otherwise train on customer data, could also shape how investors think about Palantir’s competitive moat relative to other AI infrastructure plays.
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Palantir posted a 93% jump in quarterly revenue and raised its full-year outlook, with CEO Alex Karp crediting an “otherworldly" surge in sovereign AI demand.
Summary:
- Palantir reported second quarter 2026 revenue of around $1.9 billion, up 93% year-over-year and 19% quarter-over-quarter.
- U.S. commercial revenue rose 149% year-over-year to roughly $764 million, while U.S. government revenue grew 90% year-over-year to about $809 million.
- The company closed 220 deals worth at least $1 million, including 73 deals of at least $10 million, with total contract value of around $3.4 billion, up 49% year-over-year.
- GAAP net income came in at roughly $1.1 billion, a 55% margin, with adjusted free cash flow of about $1.2 billion, a 63% margin.
- Palantir raised its full-year 2026 guidance across revenue, U.S. commercial revenue, adjusted operating income and adjusted free cash flow.
- CEO Alex Karp attributed the results to surging demand for AI sovereignty, positioning Palantir as uniquely able to convert AI usage into economic value while protecting customer data from being used to train other models.
Palantir Technologies reported sharply accelerating growth for the second quarter of 2026, with total revenue climbing 93% year-over-year to around $1.9 billion, as the company credited surging enterprise demand for what it calls AI sovereignty.
Chief Executive Officer Alex Karp described the quarter as otherworldly, pointing to a 149% year-over-year jump in U.S. commercial revenue as evidence that the company’s approach to AI deployment is resonating with customers seeking control over their own data and operations. Karp framed the company’s positioning around a broader theme, arguing that customers view their competitive advantage as something that should never become training data for other companies’ models, a stance he said underpins Palantir’s growing traction in the commercial sector.
The breakdown of results showed broad-based strength. U.S. revenue overall grew 115% year-over-year and 23% quarter-over-quarter to roughly $1.6 billion, while U.S. government revenue rose 90% year-over-year to around $809 million, indicating that growth was not confined to the commercial side of the business even as that segment outpaced it. The company closed 220 deals worth at least $1 million during the quarter, including 98 deals of at least $5 million and 73 deals of at least $10 million, contributing to total contract value of roughly $3.4 billion, up 49% year-over-year. Within that figure, U.S. commercial total contract value reached a record $2.1 billion, up 153% year-over-year, while U.S. commercial remaining deal value climbed to around $6.2 billion, up 124% year-over-year.
Profitability metrics were similarly strong. GAAP income from operations came in at roughly $912 million, representing a 47% margin, while adjusted income from operations reached about $1.2 billion, a 62% margin. The company reported a Rule of 40 score, a combined measure of growth and profitability, of 155%. GAAP net income stood at approximately $1.1 billion, a 55% margin, with GAAP earnings per share of $0.41. Cash from operations came in at roughly $1.2 billion, a 63% margin, matching adjusted free cash flow for the quarter. Palantir ended the period with cash, cash equivalents and short-term U.S. Treasury securities totalling around $9.2 billion.
Looking ahead, Palantir guided third quarter revenue to a range of roughly $2.16 to $2.16 billion, with adjusted income from operations expected between approximately $1.29 and $1.3 billion. For the full year, the company raised its revenue guidance to a range of around $8.15 to $8.16 billion, and lifted its U.S. commercial revenue guidance to in excess of $3.4 billion, implying growth of at least 134%. Palantir also raised its full-year adjusted income from operations guidance to between roughly $4.9 billion, and increased its adjusted free cash flow guidance to a range of $4.5 to $4.7 billion. The company said it continues to expect GAAP operating income and net income to remain positive in each quarter of the year.
This article was written by Eamonn Sheridan at investinglive.com.