Palantir Earnings Beat on AI and Defense

Palantir Technologies Inc. (PLTR) reported fourth-quarter 2025 earnings on Feb. 2, 2026, that topped Wall Street estimates. The company posted revenue of $1.41 billion and adjusted earnings per share of $0.25, driven by accelerating AI adoption and stronger demand from the U.S. government.

Quarter Results and Margins

Palantir said in a press release at 16:05 ET that adjusted operating income for the quarter reached $799 million, representing a 56.8% adjusted operating margin. Operating cash flow totaled $777 million, a 55.0% cash-conversion margin. Net income was $609 million. Management highlighted the combination of rapid growth and high margins, noting a Rule of 40 score of 127.0%, which measures the sum of revenue growth and profit margin and signals an unusual mix of scale and profitability for a high-growth software company.

U.S. commercial revenue rose 137.0% year over year to $507 million, while U.S. government revenue increased 66.0% to $570 million. Total U.S. revenue climbed 93.0% to $1.1 billion. The commercial segment’s faster growth relative to government sales indicates accelerating enterprise adoption of Palantir’s AI tools in the U.S.

The company closed 180 contracts worth more than $1 million each, with a combined value of $4.3 billion, up 138.0% year over year. The surge in both the number and size of large deals supports management’s view of greater revenue visibility and deeper customer engagement.

For the full year, revenue reached $4.5 billion, a 56.0% increase. The U.S. commercial business generated $1.5 billion, up 109.0%, while U.S. government revenue totaled $1.9 billion, up 55.0%. These results reflect broad gains across public and private sectors rather than reliance on a single customer base.

Guidance and Backlog

Palantir set full-year 2026 revenue guidance at about $7.2 billion, implying roughly 61.0% year-over-year growth. The company projected more than $3.1 billion in revenue from its U.S. commercial business, a roughly 115.0% increase. For the first quarter, Palantir guided revenue near $1.5 billion and forecast adjusted operating income between $870 million and $874 million, signaling expectations of continued growth alongside sustained margin gains.

At quarter end, Palantir held $7.2 billion in cash and short-term securities. Its remaining U.S. commercial deal value stood at $4.4 billion, up 145.0% year over year. This guidance, combined with large contract closings and a strong commercial pipeline, suggests continued commercial acceleration into 2026 and reinforces a cash-rich growth profile that could support expanded product deployment and go-to-market investment.