Key points:
- Palantir reported weaker than expected Q1 earnings, slipping on EPS
- Geopolitical uncertainty continues to weigh on Palantir, despite relations with US defence agencies
- The company issued Q2 revenue guidance of $470M
Data analytics giant Palantir (N YSE: PLTR) reported weaker than expected first quarter earnings before the bell today, beating on the top line but falling just short on Wall Street’s earnings consensus. After slowly transitioning from government contracts to a more commercial outlook, investors were cautious.
The movement is undoubtedly the right move to take for the company’s future vision, yet commercial clientele remains limited, straining on revenue. During a time of conflict, one could expect that a global data giant might relish the sudden rise in government activity; surely benefiting the company’s long-standing relationship with the U.S government defense and intelligence agencies.
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However, the long-standing link is still yet to reap any serious benefit in the current geopolitical situation; Palantir is struggling under the general uncertainty that is plaguing fiscal outlooks, meaning the company’s Q2 guidance has also fallen short of the previous Street forecast.
For Q1, Palantir posted revenue of $446.4M. Whilst up 31% from the previous year, and above the Street consensus of $443M, it came in just shy of the company’s own guidance of $447. Earnings came in on an adjusted basis at $0.02 per share, half of the Street expectation of $0.04.
The good news for long-term Palantir bulls is that commercial revenue is growing at a solid rate; exactly what we need to see. The company’s commercial revenue was pegged at $205M, up 54% from the last quarter and including 136% growth from U.S customers; also edging nicely past analyst expectations of $193M.
Palantir has issued revenue guidance of $470M, noting “a wide range of potential upside to our guidance, including those driven by our role in responding to developing geopolitical events.” Investors might want to pay attention to scaling political events, in which case Palantir might be a solid buy. Meanwhile, investors should also pay close attention to growing the company’s commercial base; which could be a key driver of future growth.