01—Abstract
Summary
Summary of the 10-K filed February 20, 2024. Cited figures are marked; the original filing is the authoritative source.
Palantir Technologies Inc. reported a strong financial year for 2023, demonstrating significant revenue growth and a return to profitability from operations.
The company generated $2.2 billiona in revenue, a 17% increase year-over-year, driven by expansion within both its government (55% of revenue) and commercial (45% of revenue) segments. Notably, the average revenue per top twenty customer increased to $54.6 million, indicating deeper engagement with key clients. Palantir also saw improvements in its operational efficiency, with adjusted income from operations reaching $632.8 million, and a focus on expanding its Artificial Intelligence Platform (AIP) capabilities, which began deployment in 2023.
The company's strategic focus on complex, large-scale data integration and decision-making problems continues to resonate with its customer base. Palantir's platform ecosystem, comprising Gotham, Foundry, Apollo, and AIP, is designed to be deployed across various environments, providing a robust solution for organizations dealing with intricate data challenges. Despite significant investments in research and development and sales and marketing to fuel future growth, Palantir aims to continue scaling its operations and market reach, emphasizing its unique position in solving challenging enterprise data problems.
02—Key points
Key Highlights
- Revenue grew by 17% to $2.2 billion in 2023, showing strong growth across both government (14% increase) and commercial (20% increase) segments.
- The company returned to profitability from operations, reporting an income from operations of $120.0 million, a significant improvement from a loss in the prior year.
- Adjusted income from operations (excluding stock-based compensation) was $632.8 million, highlighting operational efficiency gains.
- Palantir's customer base expanded to 497, with average revenue from top twenty customers increasing to $54.6 million, indicating growing relationships with key clients.
- The Artificial Intelligence Platform (AIP) was deployed in 2023 and is a key focus for future growth, leveraging existing platforms with large language models.
- Gross margin improved to 81% (82% excluding stock-based compensation), demonstrating effective cost management relative to revenue growth.
- Total remaining deal value grew to $3.9 billion, providing a solid base for future contracted revenue.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Palantir Technologies Inc. kept $0.09.
- Revenue$2.23B100.0%
- Cost of revenue−$431.1M19.4%
- Gross profit$1.79B80.6%
- Operating costs−$1.67B75.2%
- Operating income$120.0M5.4%
- Interest, other & tax$89.9M4.0%
- Net income$209.8M9.4%
Where FY2023 revenue went
$2.23B- Other operating costs: $1.27B, 57% of revenue
- Cost of revenue: $431.1M, 19% of revenue
- R&D: $404.6M, 18% of revenue
- Operating income: $120.0M, 5.4% of revenue
Kept 5.4% as operating incomeOperating income $120.0M · 5.4%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 20, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $2.23B$1.91B | +16.7% |
| Cost of Revenue | $431.11M$408.55M | +5.5% |
| Gross Profit | $1.79B$1.50B | +19.8% |
| R&D Expenses | $404.62M$359.68M | +12.5% |
| Operating Expenses | $1.67B$1.66B | +0.9% |
| Operating Income | $119.97M-$161.20M | +174.4% |
| Interest Expense | $3.47M$4.06M | −14.5% |
| Net Income | $209.82M-$373.70M | +156.1% |
| EPS (Basic) | $0.10$-0.18 | +155.6% |
| EPS (Diluted) | $0.09$-0.18 | +150.0% |
| Shares Outstanding (Basic) | 2.15B2.06B | +4.1% |
| Shares Outstanding (Diluted) | 2.30B2.06B | +11.3% |
05—Questions
Frequently Asked Questions
What was Palantir's revenue growth in 2023 and what drove it?
Palantir Technologies Inc. reported a 17% year-over-year revenue increase in 2023, reaching $2.2 billion. This growth was driven by both its government segment, which saw a 14% increase, and its commercial segment, which experienced a 20% increase. The expansion within existing government and commercial customer relationships was a primary driver for this growth.
Did Palantir achieve profitability in 2023?
Yes, Palantir returned to profitability from operations in 2023, reporting an income from operations of $120.0 million. This marks a significant improvement from the loss from operations reported in 2022. Adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes, was $632.8 million.
What is the significance of Palantir's Artificial Intelligence Platform (AIP)?
The Artificial Intelligence Platform (AIP) is Palantir's newest offering, deployed in 2023. It is designed to integrate their existing software platforms (Gotham and Foundry) with large language models (LLMs) and other AI technologies. AIP enables customers to derive value from AI by connecting it directly to their enterprise data and operations, facilitating decision-making within defined security and ethical constraints. It is a key strategic focus for the company's future growth.
How is Palantir expanding its customer relationships?
Palantir is expanding its customer relationships through a strategy of deepening engagement with existing clients and acquiring new ones. The company saw its average revenue from its top twenty customers increase to $54.6 million in 2023, up from $49.4 million in 2022. This growth is attributed to customers expanding their use of Palantir's platforms and services within their organizations. The introduction of AIP bootcamps also aims to accelerate customer acquisition by allowing prospects to experience the platforms with their own data quickly.
06—Continue