Palantir's Expectation-Beating Update

Palantir's Expectation-Beating Update

over 3 years ago2 mins

Mentioned in story

Palantir saw this coming from a mile off: the surveillance software maker announced better-than-expected quarterly results in its first earnings report since hitting the stock market 👀

What does this mean?

Palantir’s revenue rose by 50% in the first nine months of the year – double 2019’s entire growth. Even better, it recently got another kick thanks to a deal it’s just struck with the US army. But that also neatly sums up investors’ biggest worry about the company: it depends on a small number of very big contracts 📜 Lose one, and it’ll make a massive dent in Palantir’s profitability. At least the software-maker seems to be taking the feedback to heart: it pointed out that the proportion of its revenue coming from its 20 biggest customers has dropped from 69% to 61%.

Palantir Q3 2020 financial highlights

Why should I care?

Palantir listed on the stock market in September, but it didn’t go down the traditional route of an initial public offering. Instead, it plumped for a “direct listing”, which cuts out investment banks, their related costs, and their knack for stabilizing share prices 🏦 That usually means the company’s stock is more volatile in the early days, but not in Palantir’s case: its share price has been pretty steady, even as it’s climbed almost 50%. That might have something to do with the US election outcome, mind you: analysts are expecting the new administration to slash military spending, which could spur demand for Palantir’s (relatively) cheap surveillance technology.

Palantir stock
Source: Google Finance

Palantir was joined by Cisco on the list of tech companies with better-than-expected earnings last quarter 💻 Still, it was the fourth quarter in a row that the conglomerate’s revenue had fallen, which is probably because so much of its revenue comes from the sale of equipment for pandemic-stalled data centers and offices.

Palantir gif


All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG