01—Abstract
Summary
Summary of the 10-Q filed November 13, 2020. Cited figures are marked; the original filing is the authoritative source.
Palantir Technologies Inc. filed its Form 10-Q for the period ending September 29, 2020, on November 12, 2020.
This report details the company's financial performance and operational highlights leading up to its direct listing on the New York Stock Exchange on September 30, 2020. The company reported significant revenue growth, with a 52%a increase year-over-year for the third quarter and a 50% increase for the first nine months of 2020. Despite this revenue growth, Palantir continued to incur substantial net losses, primarily driven by high operating expenses, including significant stock-based compensation charges related to its direct listing event.
The financial statements reveal a substantial increase in cash and cash equivalents, bolstered by a significant equity raise. However, the company also reported a considerable increase in operating expenses across sales and marketing, research and development, and general and administrative functions, largely attributable to stock-based compensation and increased costs associated with becoming a public company. Investors should note the substantial net loss and the significant investment in growth and infrastructure as key factors in evaluating Palantir's financial health and future prospects.
02—Key points
Key Highlights
- Palantir reported revenue of $289.4 million for the third quarter of 2020, a 52% increase from $190.5 million in the same period of 2019. For the first nine months of 2020, revenue was $770.6 million, up 50% from $513.2 million in the prior year period.
- The company experienced a net loss of $853.3 million in the third quarter of 2020, compared to a net loss of $139.9 million in the third quarter of 2019. For the first nine months of 2020, the net loss was $1,018.0 million, compared to $420.3 million for the same period in 2019.
- Operating expenses saw a significant increase across all categories, with total operating expenses for the third quarter of 2020 reaching $987.8 million, up from $269.6 million in the third quarter of 2019. This increase was heavily influenced by stock-based compensation expenses.
- Cash and cash equivalents, including restricted cash, increased to $1,930.3 million as of September 30, 2020, from $693.4 million as of December 31, 2019, reflecting strong financing activities, including proceeds from the issuance of common stock.
- The company completed its direct listing on the New York Stock Exchange on September 30, 2020, which resulted in significant stock-based compensation charges related to the vesting of RSUs and growth units.
- Palantir continued to focus on growth, with revenue from government customers increasing by 68% and commercial customer revenue increasing by 35% in the third quarter of 2020 compared to the prior year.
- The company's total backlog of awarded government contracts was $1.3 billion as of September 30, 2020, a 14% increase from $1.1 billion as of December 31, 2019.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2020filed November 13, 2020Financial Statements
Q3 FY2020 against Q3 FY2019
| Line item | Q3 FY2020Q3 FY2019 | Change |
|---|---|---|
| Revenue | $289.37M$190.54M | +51.9% |
| Cost of Revenue | $149.34M$65.07M | +129.5% |
| Gross Profit | $140.03M$125.47M | +11.6% |
| R&D Expenses | $313.92M$75.88M | +313.7% |
| Operating Expenses | $987.80M$269.61M | +266.4% |
| Operating Income | -$847.78M-$144.14M | −488.2% |
| Interest Expense | $2.08M$173K | +1105.2% |
| Net Income | -$853.32M-$139.86M | −510.1% |
| EPS (Basic) | $-0.94$-0.24 | −291.7% |
| EPS (Diluted) | $-0.94$-0.24 | −291.7% |
| Shares Outstanding (Basic) | 905.46M580.10M | +56.1% |
| Shares Outstanding (Diluted) | 905.46M580.10M | +56.1% |
05—Questions
Frequently Asked Questions
What was Palantir's revenue performance in the third quarter of 2020?
Palantir reported revenue of $289.4 million for the third quarter of 2020, representing a 52% increase compared to $190.5 million in the same period of 2019. This growth was driven by strong performance in both the government and commercial sectors.
Did Palantir achieve profitability in the third quarter of 2020?
No, Palantir continued to incur substantial net losses. For the third quarter of 2020, the company reported a net loss of $853.3 million, a significant increase from the $139.9 million net loss in the third quarter of 2019. This was largely due to increased operating expenses, including significant stock-based compensation charges.
What was the impact of the direct listing on Palantir's financial statements?
Palantir completed its direct listing on September 30, 2020. This event triggered substantial stock-based compensation expenses, particularly related to the vesting of Restricted Stock Units (RSUs) and growth units, which significantly impacted the reported net loss for the quarter and the nine-month period.
How did Palantir's cash position change?
Palantir's cash and cash equivalents, including restricted cash, grew substantially, reaching $1,930.3 million as of September 30, 2020, up from $693.4 million at the end of 2019. This increase was primarily due to proceeds from the issuance of common stock and borrowings under its credit facilities.
How did Palantir's operating expenses change?
Operating expenses increased significantly across all categories. Total operating expenses for the third quarter of 2020 were $987.8 million, compared to $269.6 million in the third quarter of 2019. This surge was driven by higher personnel costs, especially stock-based compensation, and increased expenses related to becoming a public company.
06—Continue