Ai Platforms
Palantir Q2: Strong Revenue Growth; Mixed Key Metrics
As expected, and similar to last quarter, it's hard to find fault with Palantir’s headline numbers. Revenue growth continued to accelerate further on robust momentum in the company’s US Commercial segment, with FY26 raised once again by 14 points to more than 134% YoY growth. This roughly works out to ~21-22% QoQ growth in the back half following Q2’s 28% QoQ growth in the segment, as Palantir retains its crown as one of the strongest AI software companies that we track. NRR continued to expand with Palantir already quickly closing in on 160%. However, deeper in the report, there were areas to nitpick, such as YoY growth in RPO, remaining deal value (RDV) and total contract value (TCV) all decelerating in unison. The latter two are now lagging revenue growth by 10 to 44 points. As we said last quarter, this may sound nitpicky, but when a company is priced to perfection, these subtle shifts in forward indicators matter. Interestingly, despite the strong growth rates and strength in margins, Palantir has succumbed to the general malaise across the software sector, with shares underperforming the market the entire year so far, down (3%) YTD versus a 17% gain for the Nasdaq 100. This quarter, Palantir took a bit of a dig at the leading AI labs this quarter and hinted at an aim to take business from OpenAI and Anthropic. Management also dropped a few tidbits hinting at 150%+ growth in US Commercial through year-end 2027 and a huge disconnect to consensus -- we break all this down and the puts and takes for Palantir below.
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