Palantir's Expectation-Beating Update

Palantir's Expectation-Beating Update

over 3 years ago2 mins

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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
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