01—Abstract
Summary
Summary of the 10-Q filed November 9, 2021. Cited figures are marked; the original filing is the authoritative source.
Palantir Technologies Inc. (PLTR) reported its financial results for the nine months ended September 29, 2021.
The company demonstrated significant revenue growth, with total revenue increasing by 44% to $1.1 billiona for the nine-month period. This growth was driven by both the Government ($658.4 million, +57%) and Commercial ($450.6 million, +29%) segments. Despite strong revenue performance, Palantir continues to operate at a loss, reporting a net loss of $364.2 million for the nine months, though this represents an improvement compared to the $1.02 billion net loss in the same period last year.
The company's cash position remains robust, with $2.3 billionb in cash and cash equivalents as of September 30, 2021, and it successfully reduced operating expenses significantly, particularly in sales & marketing, R&D, and G&A, largely due to lower stock-based compensation expenses compared to the prior year's direct listing related charges. Key financial metrics show improved operational efficiency when excluding stock-based compensation. Contribution margin improved to 58% for the nine months, up from 51% in the prior year.
The company's strategic investments in various entities, totaling $153 millionc in purchases and $226.5 million in outstanding commitments, reflect a strategy to align with businesses that leverage data effectively. While the company is growing rapidly, investors should note the continued reliance on a few large customers for a significant portion of revenue and the ongoing risk factors associated with rapid scaling and market competition.
02—Key points
Key Highlights
- Revenue growth of 44% year-over-year for the nine months ended September 30, 2021, reaching $1.1 billion.
- Government segment revenue increased 57% to $658.4 million, while Commercial segment revenue grew 29% to $450.6 million for the nine-month period.
- Net loss improved significantly, decreasing from $1.02 billion to $364.2 million for the nine months ended September 30, 2021.
- Stock-based compensation expenses decreased substantially year-over-year, leading to improved reported operating expenses.
- Contribution margin improved to 58% for the nine months, indicating better operational efficiency when excluding stock-based compensation.
- Strong liquidity position with $2.3 billion in cash and cash equivalents as of September 30, 2021.
- Continued strategic investments in technology companies totaling $153 million purchased and $226.5 million in commitments as of September 30, 2021.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q3 FY2021, Palantir Technologies Inc. lost $0.26.
- Revenue$392.1M100.0%
- Cost of revenue−$86.8M22.1%
- Gross profit$305.3M77.9%
- Operating costs−$397.3M101.3%
- Operating income−$91.9M23.4%
- Interest, other & tax−$10.2M2.6%
- Net income−$102.1M26.0%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2021filed November 9, 2021Financial Statements
Q3 FY2021 against Q3 FY2020
| Line item | Q3 FY2021Q3 FY2020 | Change |
|---|---|---|
| Revenue | $392.15M$289.37M | +35.5% |
| Cost of Revenue | $86.80M$149.34M | −41.9% |
| Gross Profit | $305.34M$140.03M | +118.1% |
| R&D Expenses | $94.32M$313.92M | −70.0% |
| Operating Expenses | $397.28M$987.80M | −59.8% |
| Operating Income | -$91.94M-$847.78M | +89.2% |
| Interest Expense | $609K$2.08M | −70.8% |
| Net Income | -$102.14M-$853.32M | +88.0% |
| EPS (Basic) | $-0.05$-0.94 | +94.7% |
| EPS (Diluted) | $-0.05$-0.94 | +94.7% |
| Shares Outstanding (Basic) | 1.96B905.46M | +116.9% |
| Shares Outstanding (Diluted) | 1.96B905.46M | +116.9% |
05—Questions
Frequently Asked Questions
What was Palantir's revenue performance in the reported period?
Palantir Technologies Inc. reported strong revenue growth, with total revenue increasing by 44% to $1.1 billion for the nine months ended September 30, 2021, compared to the same period in 2020. Both the Government and Commercial segments contributed to this growth, with the Government segment up 57% and the Commercial segment up 29%.
What is the company's profitability status?
While Palantir continues to invest heavily in growth, leading to ongoing net losses, the company has shown significant improvement. For the nine months ended September 30, 2021, the net loss was $364.2 million, a substantial reduction from the $1.02 billion net loss reported in the same period of 2020. The company's operational efficiency, particularly when excluding stock-based compensation, has also improved, with a higher contribution margin.
How is the company's cash position and liquidity?
Palantir maintains a strong liquidity position. As of September 30, 2021, the company had $2.3 billion in cash and cash equivalents, providing ample resources for its ongoing operations and strategic initiatives.
What are the key drivers behind the reduction in operating expenses?
The significant decrease in operating expenses, especially in sales and marketing, R&D, and general and administrative costs, is largely attributable to a substantial reduction in stock-based compensation expenses compared to the prior year. This reduction was primarily due to significant one-time stock-based compensation charges recognized in the prior year related to the company's direct listing.
06—Continue