What Palantir Technologies (PLTR) Said on Its Q3 Earnings Call

Key Points

• Palantir’s Q3 2026 revenue surged 96% year over year to $2.313 billion, exceeding $2 billion for the first time. U.S. commercial revenue surpassed U.S. government revenue, led by strong demand for its “Sovereign AI” offering.
• Commercial revenue increased 113% to $1.168 billion, while government revenue rose 81% to $1.146 billion. The company also reported a 165% net dollar retention rate, $13.4 billion in remaining deal value, and continued customer expansions.
• Palantir raised its full-year 2026 outlook to $8.530 billion-$8.534 billion in revenue, implying 91% growth. Profitability and cash flow remained strong, with a 62% adjusted operating margin and $1.216 billion in adjusted free cash flow during the quarter.

Palantir Technologies NASDAQ: PLTR reported third-quarter 2026 revenue growth of 96% year over year and 20% sequentially, with quarterly revenue surpassing $2 billion for the first time. The company said demand for its “Sovereign AI” offering helped drive particularly strong growth in its U.S. commercial business, which exceeded U.S. government revenue during the quarter for the first time.

Third-quarter revenue totaled $2.313 billion, including $1.937 billion from the United States, up 119% from a year earlier. U.S. revenue represented 84% of companywide revenue, according to Chief Revenue Officer and Chief Legal Officer Ryan Taylor.

Commercial revenue crosses $1 billion

Commercial revenue rose 113% year over year and 24% sequentially to $1.168 billion, marking the segment’s first quarter above $1 billion. U.S. commercial revenue increased 148% from a year earlier and 29% from the prior quarter to $984 million.

Chief Financial Officer Dave Glazer said U.S. commercial revenue increased by $587 million from the third quarter of 2025. The company closed $1.463 billion in U.S. commercial total contract value, or TCV, bookings during the quarter, up 11% year over year. Over the past 12 months, U.S. commercial TCV bookings reached $6.114 billion, a 62% increase from the preceding 12-month period.

Palantir said its U.S. commercial customer count reached 686, up 29% year over year and 5% sequentially. Total remaining deal value in the U.S. commercial business increased 79% year over year. International commercial revenue grew 21% year over year to $184 million.

Taylor cited several customer expansions, including an industrial materials company that converted a nearly $3 million pilot into a $29 million annual contract value, or ACV, agreement. A global athletic company converted a $1.6 million pilot into an approximately $21 million ACV deal, while a global home-appliance company expanded from a $1 million pilot to a $15 million ACV agreement across commercial, finance and supply-chain workflows.

The company said revenue from strategic commercial contracts was approximately $400,000 in the third quarter, or less than 0.02% of total revenue. It expects less than $500,000 of revenue from those contracts in the fourth quarter and no further revenue thereafter.

Government segment also tops $1 billion

Government revenue rose 81% year over year and 16% sequentially to $1.146 billion, also crossing the $1 billion threshold for the first time. U.S. government revenue increased 96% year over year and 18% sequentially to $953 million, while international government revenue rose 31% to $192 million.

Taylor said Palantir’s government growth reflected work across civil and defense programs, including Maven. He noted that the U.S. Army awarded the company a prime agreement to produce eight TITAN systems during the third quarter.

Chief Technology Officer Shyam Sankar said Maven now has more than 100,000 users and is available across military services, combatant commands and many combat support agencies. He also highlighted the company’s Disconnected Ontology Resilient Architecture, or DORA, which he described as embedded computing equipment designed to bring Maven capabilities to disconnected operations.

Companywide, Palantir closed $2.918 billion in TCV bookings, up 6% year over year. Net dollar retention was 165%, an increase of 800 basis points from the prior quarter. Total remaining deal value reached $13.4 billion, up 55% year over year, while remaining performance obligations were $4.9 billion, up 88%.

Profitability and cash flow expand

Palantir reported GAAP operating income of $1.085 billion, or a 47% margin, and GAAP net income of $1.128 billion, or a 49% margin. GAAP and adjusted earnings per share were both $0.44.

Adjusted income from operations was $1.427 billion, producing a 62% adjusted operating margin. Adjusted gross margin was 85%. The company generated $1.205 billion in cash from operations and $1.216 billion in adjusted free cash flow, representing margins of 52% and 53%, respectively.

Palantir ended the quarter with $10.4 billion in cash equivalents and U.S. Treasury securities. Stock-based compensation expense was $319 million, while equity-related employer payroll tax expense was $23 million.

Glazer said adjusted expenses rose 53% year over year and 20% sequentially to $887 million, primarily due to investments in the company’s AI platform, research and development, and technical hiring.

Company raises full-year outlook

For the fourth quarter, Palantir expects revenue of $2.649 billion to $2.653 billion and adjusted income from operations of $1.640 billion to $1.644 billion.

For full-year 2026, the company raised its revenue outlook to a range of $8.530 billion to $8.534 billion. The midpoint represents 91% year-over-year growth and is nine percentage points above the company’s prior full-year revenue growth outlook.

• Full-year U.S. commercial revenue is expected to exceed $3.559 billion, representing growth of at least 143%.
• Adjusted income from operations is expected to range from $5.245 billion to $5.249 billion.
• Adjusted free cash flow is expected to range from $4.8 billion to $5 billion.
• The company continues to expect GAAP operating income and net income in every quarter of 2026.

During the call, CEO Alex Karp said customers are increasingly seeking to retain control of their operational data and AI models, which Palantir refers to as sovereignty. Sankar said the company’s approach centers on deploying AI within enterprise workflows rather than focusing solely on individual knowledge-worker productivity, with the goal of producing measurable operational returns.

About Palantir Technologies (NASDAQ:PLTR)

Palantir Technologies Inc develops software platforms that help government agencies and commercial organizations integrate, analyze and act on data. Its products are designed to support complex operations such as defense and intelligence, supply-chain management, manufacturing, healthcare and other data-intensive activities.

Palantir's principal platforms include Gotham, which is primarily used by government and defense customers; Foundry, which helps commercial and institutional users build data-driven workflows; Apollo, a platform for deploying and managing software across diverse environments; and the Artificial Intelligence Platform (AIP), which connects generative artificial intelligence capabilities with an organization's data and operational systems.

Founded in 2003, the company initially focused on software for government and national-security applications before expanding into commercial markets.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.