How does Palantir balance going after government deals versus commercial deals, given high demand?

Palantir prioritizes U.S. national security above all else, dedicating company resources when the U.S. warfighter is in danger. This stance provides leverage with both government and commercial clients, as the company insists on doing work that will lead to success and real impact. Demand currently outstrips supply in the U.S. “The reality of how Palantir works is we always -- we position and prioritize the U.S. war fighters over everything else. And when we believe or know because of our proximity that the U.S. war fighter is at in danger, we put the whole company against it.”

How many customers truly understand Palantir's AI value proposition versus trying other AI labs? How easy is it to acquire talent?

Many customers initially flirt with other AI solutions but eventually return to Palantir due to its proven ability to deliver results in complex enterprise environments. Palantir attracts unique talent, including neurodivergent individuals, by offering a unique, high-impact work environment, though talent acquisition remains a competitive battle. “The advantage that we have at Palantir is if you come to Palantir, you learn how to build something that is truly unique. And quite frankly, if you want to leave Palantir, you can have any job in the world.”

Given Maven and TITAN's progress, how much does defense growth depend on budget appropriation, especially in an election year with potential continuing resolutions?

The defense side is very active, with significant work beyond Maven and TITAN. While acknowledging the historical likelihood of continuing resolutions (CRs) in an election year, management is confident in the existential role Palantir plays in moving the department forward and expects to realize that value regardless. “History would suggest, of course, we're going to be in a CR because we -- like most time since Palantir's existed, there's always been a CR. So there are certain things that are outside of our control, but I feel very good that the role we're playing, the stakes are very high.”

PLTR

Palantir Technologies (PLTR) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Information Technology· May 4, 2026

Source: earnings call transcript

Executive summary

Palantir Technologies Inc. Q1 FY26 — Record Revenue Growth and AI Platform Dominance

Palantir delivered a record-breaking quarter, driven by exceptional demand for its AI platform (AIP), particularly in the U.S. market where revenue grew over 100%. The company emphasizes its unique positioning against 'AI slop' by providing a battle-tested platform for operational AI, enabling customers to achieve tangible results and redefine their industries. Management remains focused on investing in product development and talent while maintaining strong profitability and cash flow generation.

Highlights

Total revenue grew 85% year-over-year to $1.633 billion, marking the highest overall revenue growth rate as a public company.
U.S. business revenue surpassed 100% year-over-year growth for the first time, reaching 104% year-over-year and $1.282 billion.
U.S. commercial revenue grew 133% year-over-year to $595 million, demonstrating exceptional momentum.
Rule of 40 score climbed to 145%, an 18-point increase from the prior quarter, highlighting strong combined growth and profitability.
Adjusted free cash flow reached $925 million, representing a 57% margin, with $8 billion in cash and equivalents.

Concerns

Adjusted expense increased 32% year-over-year to $649 million, driven by continued investment in AI platform and technical hiring.
Revenue from strategic commercial contracts is expected to decline to less than $0.5 million in each remaining quarter of the year.
The company acknowledges the historical pattern of extended continuing resolutions (CR) in government, which could impact future growth.

Guidance & targets

Category	Target	Timeline	Confidence
Q2 2026 Revenue	$1.797 billion to $1.801 billion high materiality	Q2 · FY26	High
Q2 2026 Adjusted Income from Operations	$1.063 billion to $1.067 billion high materiality	Q2 · FY26	High
Full Year 2026 Revenue	$7.650 billion to $7.662 billion high materiality	FY26	High
Full Year 2026 U.S. Commercial Revenue	in excess of $3.224 billion high materiality	FY26	High
Full Year 2026 Adjusted Income from Operations	$4.440 billion to $4.452 billion high materiality	FY26	High
Full Year 2026 Adjusted Free Cash Flow	$4.2 billion to $4.4 billion high materiality	FY26	High
Full Year 2026 GAAP Operating Income and Net Income	expected in each quarter medium materiality	FY26	High
Full Year 2026 Rule of 40 Score	129% high materiality	FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Total Company Highest overall revenue growth rate as a public company.	$1.633B	85%	16%	—
U.S. Business First time achieving triple-digit growth since DPO.	$1.282B	104%	19%	—
Commercial Strong growth driven by AI platform dominance in U.S. markets.	$774M	95%	14%	—
U.S. Commercial Exceptional growth, would have been 143% YoY and 22% QoQ absent a customer transition to U.S. government.	$595M	133%	18%	—
International Commercial Steady growth in international markets.	$179M	26%	5%	—
Strategic Commercial Contracts Represented 0.2% of overall revenue, expected to be less than $0.5M in remaining quarters of FY26.	$3M	—	—	—
Government Growth driven by continued execution in existing programs and new awards.	$858M	76%	18%	—
U.S. Government Strong growth reflecting growing demand for AI platform in government.	$687M	84%	21%	—
International Government Solid growth in international government sector.	$172M	51%	7%	—

PLTR operating KPIs by quarter

PLTR operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Jun 2025 Q2 FY25	Sep 2025 Q3 FY25	Dec 2025 Q4 FY25	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Total contract value booked	—	$1.5B First quarter TCV booked was $1.5 billion, up 66% year-over-year. Source: earnings call transcript	$2.3B We booked our highest TCV and ACV ever last quarter with $2.3 billion in TCV and $684 million in ACV. Source: earnings call transcript	$2.8B We closed our highest TCV quarter ever at $2.8 billion. Source: earnings call transcript	$4.3B We closed our highest TCV quarter ever at $4.3 billion, and fourth quarter trailing 12-month revenue from our top 20 customers increased 45% year-over-year to $94 million per customer, a testament to our customers' conviction. Source: earnings call transcript	$2.4B We closed $2.4 billion of TCV bookings, up 61% year-over-year. Source: earnings call transcript	$3.4B We closed $3.4 billion of TCV bookings, up 49% year-over-year. Source: earnings call transcript	+41.7%
Customers	711 Customer count grew 43% year-over-year and 13% sequentially to 711 customers. Source: earnings call transcript	769 Customer count grew 39% year-over-year and 8% sequentially to 769 customers. Source: earnings call transcript	849 Customer count grew 43% year-over-year and 10% sequentially to 849 customers. Source: earnings call transcript	911 Customer count grew 45% year-over-year and 7% sequentially to 911 customers. Source: earnings call transcript	954 Customer count grew 34% year-over-year and 5% sequentially to 954 customers. Source: earnings call transcript	1,007 Customer count grew 31% year-over-year and 6% sequentially to 1,007 customers. Source: earnings call transcript	—	+5.6%
Total contract value booked Commercial	$995M We had the strongest quarter of commercial TCV booked at $995 million, representing 42% growth year-over-year and 63% growth sequentially. Source: earnings call transcript	$930M We closed $930 million in commercial TCV bookings, representing 84% growth year-over-year. Source: earnings call transcript	$1.1B We closed $1.1 billion in commercial TCV bookings, representing 185% growth year-over-year. Source: earnings call transcript	$1.4B We closed $1.4 billion in commercial TCV bookings representing 132% growth year-over-year and 32% sequentially. Source: earnings call transcript	$2.6B We closed $2.6 billion in commercial TCV bookings in the fourth quarter, representing 161% growth year-over-year and 83% sequentially. Source: earnings call transcript	$1.3B We closed $1.3 billion in commercial TCV bookings in the first quarter, representing 42% growth year-over-year. Source: earnings call transcript	$2.337B We closed $2.337 billion in commercial TCV bookings in the second quarter, representing 118% growth year-over-year. Source: earnings call transcript	+79.8%
Total contract value booked US Commercial	$803M We also had our strongest quarter of US commercial TCV booked at $803 million, representing growth of 134% year-over-year and 170% sequentially. Source: earnings call transcript	$810M We closed $810 million in US commercial TCV with a 239% year-over-year growth rate on a dollar-weighted duration basis, and we closed twice as many deals of $1 million or more compared to the same time period a year ago. Source: earnings call transcript	$843M We had our strongest quarter of US commercial TCV booked at $843 million, representing growth of 222% year-over-year. Source: earnings call transcript	$1.3B We closed $1.3 billion in TCV, a milestone achievement for the fastest-growing area of our business with a more than 6x year-over-year growth rate on a dollar-weighted duration basis. Source: earnings call transcript	$1.3B In the fourth quarter, we closed $1.3 billion of US commercial TCV bookings, representing growth of 67% year-over-year. Source: earnings call transcript	$1.2B In Q1, we closed our third consecutive quarter of over $1 billion in US commercial TCV bookings at $1.2 billion, representing growth of 45% year-over-year. Source: earnings call transcript	$2.132B We closed $2.132 billion of US commercial TCV bookings, representing growth of 153% year-over-year and 81% sequentially, nearly $800 million above our prior highest US commercial bookings quarter. Source: earnings call transcript	+77.7%
Customers US Commercial	382 Our US commercial customer count grew to 382 customers, growth of 73% year-over-year and 19% sequentially. Source: earnings call transcript	432 Our US commercial customer count grew to 432 customers reflecting growth of 65% year-over-year and 13% sequentially. Source: earnings call transcript	485 Our US commercial customer count grew to 485 customers, reflecting growth of 64% year-over-year and 12% sequentially. Source: earnings call transcript	530 Our US commercial customer count grew to 530 customers, reflecting growth of 65% year-over-year and 9% sequentially. Source: earnings call transcript	571 Our US commercial customer count grew to 571 customers, reflecting growth of 49% year-over-year and 8% sequentially. Source: earnings call transcript	615 Our US commercial customer count grew to 615 customers, reflecting growth of 42% year-over-year and 8% sequentially. Source: earnings call transcript	653 Our US commercial customer count grew to 653 customers, reflecting growth of 35% year-over-year and 6% sequentially. Source: earnings call transcript	+6.2%
Net revenue retention rate	120% Net dollar retention was 120%, an increase of 200 basis points from last quarter. Source: earnings call transcript	124% Net dollar retention was 124%, an increase of 400 basis points from last quarter. Source: earnings call transcript	128% Net dollar retention was 128%, an increase of 400 basis points from last quarter. Source: earnings call transcript	134% Net dollar retention was 134%, an increase of 600 basis points from last quarter. Source: earnings call transcript	139% Net dollar retention was 139%, an increase of 500 basis points from last quarter. Source: earnings call transcript	150% Net dollar retention was 150%, an increase of 1,100 basis points from last quarter. Source: earnings call transcript	157% Net dollar retention was 157%, an increase of 700 basis points from last quarter. Source: earnings call transcript	+7 pt
Total remaining deal value	$5.43B We ended the fourth quarter with $5.43 billion in total remaining deal value, an increase of 40% year-over-year and 20% sequentially; and $1.73 billion in remaining performance obligations, an increase of 39% year-over-year and 10% sequentially. Source: earnings call transcript	$5.97B We ended the first quarter with $5.97 billion in total remaining deal value, an increase of 45% year-over-year and 10% sequentially and $1.9 billion in remaining performance obligations, an increase of 46% year-over-year and 10% sequentially. Source: earnings call transcript	$7.1B We ended the second quarter was $7.1 billion in total remaining deal value, an increase of 65% year-over-year and 20% sequentially and $2.4 billion in remaining performance obligations, an increase of 77% year-over-year and 27% sequentially. Source: earnings call transcript	$8.6B We ended the third quarter with $8.6 billion in total remaining deal value, an increase of 91% year-over-year and 21% sequentially and $2.6 billion in the remaining performance obligations, an increase of 66% year-over-year and 8% sequentially. Source: earnings call transcript	$11.2B We ended the fourth quarter with $11.2 billion in total remaining deal value, an increase of 105% year-over-year and 29% sequentially and $4.2 billion in remaining performance obligations, an increase of 144% year-over-year and 62% sequentially. Source: earnings call transcript	$11.8B We ended the first quarter with $11.8 billion in total remaining deal value, an increase of 98% year-over-year and 6% sequentially and $4.5 billion in remaining performance obligations, an increase of 134% year-over-year and 9% sequentially. Source: earnings call transcript	$13.1B We ended the second quarter with $13.1 billion in total remaining deal value, an increase of 83% year-over-year and 11% sequentially and $4.9 billion in remaining performance obligations, an increase of 103% year-over-year and 10% sequentially. Source: earnings call transcript	+11%
Remaining performance obligation (RPO)	$1.73B We ended the fourth quarter with $5.43 billion in total remaining deal value, an increase of 40% year-over-year and 20% sequentially; and $1.73 billion in remaining performance obligations, an increase of 39% year-over-year and 10% sequentially. Source: earnings call transcript	$1.9B We ended the first quarter with $5.97 billion in total remaining deal value, an increase of 45% year-over-year and 10% sequentially and $1.9 billion in remaining performance obligations, an increase of 46% year-over-year and 10% sequentially. Source: earnings call transcript	$2.4B We ended the second quarter was $7.1 billion in total remaining deal value, an increase of 65% year-over-year and 20% sequentially and $2.4 billion in remaining performance obligations, an increase of 77% year-over-year and 27% sequentially. Source: earnings call transcript	$2.6B We ended the third quarter with $8.6 billion in total remaining deal value, an increase of 91% year-over-year and 21% sequentially and $2.6 billion in the remaining performance obligations, an increase of 66% year-over-year and 8% sequentially. Source: earnings call transcript	$4.2B We ended the fourth quarter with $11.2 billion in total remaining deal value, an increase of 105% year-over-year and 29% sequentially and $4.2 billion in remaining performance obligations, an increase of 144% year-over-year and 62% sequentially. Source: earnings call transcript	$4.5B We ended the first quarter with $11.8 billion in total remaining deal value, an increase of 98% year-over-year and 6% sequentially and $4.5 billion in remaining performance obligations, an increase of 134% year-over-year and 9% sequentially. Source: earnings call transcript	$4.9B We ended the second quarter with $13.1 billion in total remaining deal value, an increase of 83% year-over-year and 11% sequentially and $4.9 billion in remaining performance obligations, an increase of 103% year-over-year and 10% sequentially. Source: earnings call transcript	+8.9%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Commercial TCV bookings $1.3B Q1 FY26

42% growth year-over-year

U.S. Commercial TCV bookings $1.2B Q1 FY26

45% growth year-over-year

Third consecutive quarter of over $1 billion in U.S. commercial TCV bookings.

U.S. Commercial TCV bookings (LTM) $4.7B Q1 FY26

115% increase from prior 12 months

Highlighting accelerating demand for AI that creates real operational value.

Total Remaining Deal Value $11.8B Q1 FY26

98% increase year-over-year, 6% sequentially

U.S. Commercial Remaining Deal Value increased Q1 FY26

112% year-over-year, 12% sequentially

Government TCV bookings $2.4B Q1 FY26

61% growth year-over-year

On a dollar-weighted duration basis, TCV bookings grew 135% year-over-year.

Remaining Performance Obligations (RPO) $4.5B Q1 FY26

134% increase year-over-year, 9% sequentially

Primarily comprised of commercial business; does not include contracts with initial term less than 12 months or obligations beyond termination for convenience clauses common in government business.

Product announcements

Product	Type	Timeline	Details
Agent Engine SDK	launch	—
Next Generation of Apollo	update	—

Deals & partnerships

GE Aerospace partnership

Deepened partnership to deploy Agentic AI-powered solutions across their production system and military aviation supply chain, with a shared mission of ensuring more aircraft remain available for U.S. Air Force pilots.

Ondas and World View partnership

Expanded work with Palantir to bring AIP to the stratosphere and build the operational backbone required to scale their missions, enabling dozens or 100 simultaneous launches with the same operational efficiency.

USDA customer contract up to $300M

Awarded a contract to provide USDA with capabilities to support American farmers, secure farmland, enhance supply chain resilience, and shield agricultural programs from fraud, abuse, and foreign adversary influence.

Risks & headwinds

Rising operating expenses Q1 FY26

Adjusted expense up 32% year-over-year to $649 million

Mitigation:Continued investment in AI platform and technical hiring, with commitment to sustained GAAP profitability.

Potential for extended continuing resolution (CR) FY26

History suggests CRs are common in election years

Mitigation:Management is confident in the existential role Palantir plays in moving the department forward and expects to realize value regardless.

Talent competition Ongoing

Super competitive environment for engineers

Mitigation:Palantir attracts and retains top talent by offering a unique, high-impact work environment and focusing on neurodivergent individuals.

Market perception of 'AI slop' Ongoing

Risk of customers being misled by 'appearances of software working' vs. actual results

Mitigation:Palantir differentiates itself by delivering proven, battle-tested operational AI through its AIP and Ontology, which provides precision and governance.

Q&A highlights

How does Palantir navigate an environment where AI is pressuring software?

Palantir is counter-positioned against legacy software and 'AI slop' by focusing on enterprise autonomy and the Ontology as a 'no slop zone' that delivers real outcomes, not just demos. This approach makes AI a massive tailwind for the company.

“We, on the other hand, have been focused entirely on building software that's focused on alpha and not beta. We're not trying to make you the same as every other person. We're trying to figure out what makes you different, how do we express your business strategy through the software platforms and products we build.”

asked by Aidan (Shareholder) · answered by Shyam Sankar

2 min read 5 chapters

Detailed narrative

AIP Dominance and 'No Slop Zone'

Palantir's AI Platform (AIP) is highlighted as the only solution capable of converting AI leverage into real-world value without risking enterprise disaster, establishing a 'no slop zone.' The platform enables multi-agentic solutions, as seen with AIG deploying AIP for underwriting and claims, and is critical for operational AI in production at scale.

This unique capability allows companies to redefine how they compete within their industries, moving beyond mere cost-cutting.

U.S. Business Acceleration and Demand

The U.S. business achieved triple-digit growth for the first time, with revenue growing 104% year-over-year and 19% sequentially. This acceleration was driven by surging demand for AIP, particularly in the U.S. commercial sector, which saw 133% year-over-year growth. Management noted that demand in the U.S. currently outstrips supply, indicating significant market opportunity and the company's unique position in delivering tangible AI results.

Jevon's Paradox and Token Economics

The company observes 'Jevon's paradox' in AI, where the precipitous drop in token costs (GPT-4 equivalent performance is 1,000x cheaper) leads to an explosion in use case demand. While cheaper inference allows more tasks, it also increases 'slop' and the need for a system like AIP to prevent economic harm.

The Ontology acts as the 'body to the AI brains,' providing the necessary harness for governance, attribution, and audibility of agent actions, making it indispensable for enterprise AI.

Government and Defense Impact

Palantir's platforms are critical for the U.S. government and defense. Maven usage has doubled in the past four months and quadrupled over the past year, supporting warfighters. ShipOS, in partnership with the Department of the Navy, has dramatically improved manufacturing processes, reducing bill of materials approval time from 200 hours to 15 seconds.

AIP is becoming the default builder platform in the Department of War, with thousands of developers using AIFD to modernize American manufacturing and solve complex problems.

Talent Strategy and Market Counter-Positioning

Palantir maintains its reputation for attracting top talent, including 'neurodivergent' individuals, despite a competitive environment. The company positions itself against 'legacy thin software' and 'AI slop,' arguing that its focus on 'alpha' (unique business strategy) and enterprise autonomy delivers actual results. Management believes that while competitors offer 'beautiful shiny appearances,' Palantir transforms enterprises, leading to sustained growth and profitability.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.