01—Abstract
Summary
Summary of the 10-K filed February 26, 2021. Cited figures are marked; the original filing is the authoritative source.
Palantir Technologies Inc. (PLTR) filed its 10-K for the fiscal year ending December 31, 2020, revealing a significant growth in revenue and a strategic focus on expanding its customer base across both government and commercial sectors.
The company reported robust revenue growth of 47%, reaching $1.1 billiona, driven by strong performance in its government segment, which contributed 56% of total revenue, and continued expansion in its commercial operations. While Palantir has not yet achieved profitability, incurring a net loss of $1.17 billion for the year, its gross profit increased by 48%. The company highlights its strategy of acquiring customers through initial pilots and then expanding relationships, leading to a substantial increase in average revenue per customer.
Palantir's core offerings, Gotham and Foundry, are positioned as essential operating systems for data management and analysis in complex organizations, with significant investment in research and development to maintain platform capabilities. The filing also details Palantir's commitment to privacy and security, its multi-class stock structure that concentrates voting power, and various risk factors including competition, dependence on key personnel, and evolving regulatory landscapes.
02—Key points
Key Highlights
- Revenue grew by 47% year-over-year to $1.1 billion for the fiscal year ended December 31, 2020.
- The government segment remains the larger contributor, accounting for 56% of total revenue, while the commercial segment grew significantly at 22%.
- Palantir experienced a net loss of $1.17 billion but saw a 48% increase in gross profit, indicating improved operational efficiency.
- Average revenue per customer increased by 41% from $5.6 million in 2019 to $7.9 million in 2020.
- The company continues to invest heavily in Research & Development, with R&D expenses increasing by 83% year-over-year.
- Palantir's business model relies on acquiring customers through initial pilots and then expanding their usage, leading to growth in customer accounts over time.
- The company maintains a strong focus on data privacy and security, integrating these principles into its software platforms from inception.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2020, Palantir Technologies Inc. lost $1.07.
- Revenue$1.09B100.0%
- Cost of revenue−$352.5M32.3%
- Gross profit$740.1M67.7%
- Operating costs−$1.91B175.1%
- Operating income−$1.17B107.4%
- Interest, other & tax$7.3M0.7%
- Net income−$1.17B106.7%
04—Financials
Financial Highlights
Figures from 10-KFY2020filed February 26, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $1.09B$742.55M | +47.2% |
| Cost of Revenue | $352.55M$242.37M | +45.5% |
| Gross Profit | $740.13M$500.18M | +48.0% |
| R&D Expenses | $560.66M$305.56M | +83.5% |
| Operating Expenses | $1.91B$1.08B | +77.8% |
| Operating Income | -$1.17B-$576.44M | −103.6% |
| Interest Expense | $14.14M$3.06M | +361.9% |
| Net Income | -$1.17B-$579.65M | −101.2% |
| EPS (Basic) | $-1.19$-1.02 | −16.7% |
| EPS (Diluted) | $-1.20$-1.02 | −17.6% |
| Shares Outstanding (Basic) | 977.72M576.96M | +69.5% |
| Shares Outstanding (Diluted) | 979.33M576.96M | +69.7% |
05—Questions
Frequently Asked Questions
What was Palantir's financial performance in the fiscal year 2020?
For the fiscal year ended December 31, 2020, Palantir reported a 47% increase in revenue, reaching $1.1 billion. However, the company incurred a net loss of $1.17 billion. Despite the net loss, gross profit increased by 48% year-over-year, and average revenue per customer saw a 41% rise.
How does Palantir generate revenue, and what is its business model?
Palantir generates revenue through subscriptions to its software platforms, Gotham and Foundry, which include operations and maintenance (O&M) services, as well as professional services. Its business model involves acquiring customers through initial pilot deployments, often at a low or no cost, and then expanding their use of the platforms within their organizations, aiming to move them to a 'Scale' phase of engagement.
What are the key segments of Palantir's business?
Palantir operates primarily in two segments: Government, which serves U.S. federal agencies and allied governments, and Commercial, which targets non-government industries. In 2020, the Government segment accounted for 56% of revenue, while the Commercial segment accounted for 44%.
What are the main risks highlighted in the 10-K filing?
Key risks identified include a history of operating losses and the potential for future losses, the long and unpredictable sales cycle, significant reliance on a small number of large customers, intense competition, the complexity of its platforms and lengthy implementation processes, potential failure to develop new technologies, and the impact of the COVID-19 pandemic. Additionally, the multi-class stock structure concentrates voting power with the founders.
06—Continue