10-KPeriod: FY2020

Palantir Technologies Inc. Annual Report, Year Ended Dec 31, 2020

Filed February 26, 2021For Securities:PLTR

Summary

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 billion, 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.

Financial Highlights

53 data points
Beta

Revenue

$1.09B

67.7% Gross Margin

Net Income

-$1.17B

-106.7% Net Margin

EPS (Diluted)

$-1.20

Total Assets

$2.69B

Cash & Equivalents

$2.01B

Free Cash Flow

-$308.84M

Financial Statements
Beta
Revenue$1.09B
Cost of Revenue$352.55M
Gross Profit$740.13M
R&D Expenses$560.66M
Operating Expenses$1.91B
Operating Income-$1.17B
Interest Expense$14.14M
Net Income-$1.17B
EPS (Basic)$-1.19
EPS (Diluted)$-1.20
Shares Outstanding (Basic)977.72M
Shares Outstanding (Diluted)979.33M

Key Highlights

  • 1Revenue grew by 47% year-over-year to $1.1 billion for the fiscal year ended December 31, 2020.
  • 2The government segment remains the larger contributor, accounting for 56% of total revenue, while the commercial segment grew significantly at 22%.
  • 3Palantir experienced a net loss of $1.17 billion but saw a 48% increase in gross profit, indicating improved operational efficiency.
  • 4Average revenue per customer increased by 41% from $5.6 million in 2019 to $7.9 million in 2020.
  • 5The company continues to invest heavily in Research & Development, with R&D expenses increasing by 83% year-over-year.
  • 6Palantir's business model relies on acquiring customers through initial pilots and then expanding their usage, leading to growth in customer accounts over time.
  • 7The company maintains a strong focus on data privacy and security, integrating these principles into its software platforms from inception.

Frequently Asked Questions

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.

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.

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%.

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.