Palantir Technologies Inc. Class A Common Stock 2026 Q2 Earnings Call

Good afternoon. I'm Ana Soro from Palantir's finance team. I'd like to welcome you to our second quarter 2026 earnings call. We'll be discussing the results announced in our press release issued after the market closed and posted on our investor relations website. During the call, we will make statements regarding our business that may be considered forward-looking within applicable securities laws, including statements regarding our third quarter and fiscal 2026 results, management's expectations for our future financial and operational performance, and other statements regarding our plans, prospects, and expectations. These statements are not promises or guarantees and are subject to risks and uncertainties which could cause them to differ materially from actual results. Information concerning those risks is available in our earnings press release distributed after the market closed today and in our SEC filings. We undertake no obligation to update forward-looking statements except as required by law.

Further, during the course of today's call, we will refer to certain adjusted financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, GAAP measures. Additional information about these non-GAAP measures, including reconciliation of non-GAAP to comparable GAAP measures, is included in our press release and investor presentation provided today. Our press release, investor presentation, and other earnings materials are available on our investor relations website at investors.palantir.com. Over the course of the call, we will refer to various growth rates when discussing our business. These rates reflect year-over-year comparisons unless otherwise stated. Joining me on today's call are Alex Karp, Chief Executive Officer, Shyam Sankar, Chief Technology Officer, David Glazer, Chief Financial Officer, and Ryan Taylor, Chief Revenue Officer and Chief Legal Officer. I'll now turn it over to Ryan to start the call.

Our Q2 results are unprecedented but entirely unsurprising, as the abrupt market shift in LLMs that we've been warning you about for years is now here. We delivered 93% year-over-year revenue growth, our highest ever. The story of this quarter is, once again, our U.S. business. It now comprises over 81% of total revenue and grew 115% year-over-year and 23% sequentially. Our U.S. commercial revenue growth accelerated to 149% year-over-year and 28% sequentially. Our U.S. government revenue grew a remarkable 90% year-over-year and 18% sequentially. These top-line results are accompanied by a Rule of 40 score of 155 and $1.22 billion of adjusted free cash flow. We closed 220 deals worth $1 million or more, of which 98 deals were worth $5 million or more, and 73 deals were worth $10 million or more. Record highs across the board.

These results are a clear indication of the profound value we've unlocked both for and with our customers who dared to cross the chasm with us. In contrast, enterprises that are not using Palantir are seeing their token meters spinning endlessly just to get slop without any correlation to value. This token model may be working for the labs, but it is not working for anyone else. It's breaking corporate budgets without results to justify the expense. Worse, companies are paying to give away their most important secrets, the very basis for their competitive advantage. Ultimately contributing to the commoditization of their own businesses as their secrets become the training data embedded in the foundations of all future models. On our side of the chasm, what enterprises demand is AI sovereignty, owning the operational definition of the data, logic, actions, and security of their enterprise.

An organization's data is its treasure. In its richness is the alpha. We are fully aligned with our customers, building a stack that enables the compounding of their alpha. Our deep alignment allows our customers' ambitions and our own to become one. As Kirkland & Ellis highlighted, quote, "Through our work with Palantir, we have built a new operating model for legal services, one that centralizes and compounds the expertise of our most senior lawyers. What used to take days for a lawyer to analyze, discuss, and draft now happens in minutes. This would be impossible without the Ontology. We do not see this as a vendor relationship or a one-off endeavor.

We think this is a revolutionary change in how our work gets done." This is what we do with our customers across industries. The deals we are closing are a testament to the monumental shift in the AI market that's underway as we speak. In our U.S. commercial business, we closed $2.1 billion in TCV with a 271% year-over-year growth rate on a dollar-weighted duration basis. A multinational technology company began working with us in the fourth quarter of last year at one operating company and expanded on their success with our platform to deliver revolutionary impact across their full portfolio, converting to a three-year, nearly $370 million deal last quarter. Customers are decisive and bold about taking the next step with Palantir.

A global asset management firm started working with us in Q1, converted last quarter to a three-year $35 million TCV deal spanning asset management automation and investment lifecycle intelligence across four verticals. After an Agent Camp in May, a global software and services company signed an initial $15 million five-month deal last quarter. A leading nonprofit health system signed a pilot at the end of 2025, converted last quarter to a three-year partnership at $37 million TCV. Our U.S. government business remains a source of extraordinary strength, with momentum across both defense and civil. We continue to take great pride in our U.S. government work, equipping our nation with the most advanced battle-tested AI capabilities. For Palantir, this is our calling.

Our customers are making the decision to go deep with us with greater urgency and conviction than I've ever seen before, choosing AI sovereignty over dependency and compounding their alpha in a way that their competitors and adversaries will forever envy. I'll now turn it over to Shyam.

Thanks, Ryan. Ryan just talked about the incredible customer momentum behind sovereign AI. I want to spend some time on the underlying product investments that positioned us for this moment. AIP succeeded because it's the best, most ergonomic environment for AI in the enterprise. It integrates mixed model AI teams across heterogeneous, interdependent workflows and delivers the fastest implementations that turn tokens into real economic value for our customers in complex, high-stakes environments. What makes it work is exquisite and layered. Data integration and transformation, Ontology and actions, security and audit, workflows, agent SDKs, agent orchestration with telemetry and observability, evals and customer-specific benchmarks, AIP Evolve, and our latest investments in post-training, both supervised fine-tuning and reinforcement learning. Every layer builds on our foundational primitives, every layer flows together.

This infrastructure captures the rich operational telemetry to feed the compounding loop, an automated model factory that runs inside the customer security boundary and accumulates intelligence in weights they control. Last quarter, I said tokens are the new coal and AIP is the train. Now our customers can build their own locomotives. AIP is where your sovereign AI is built, deployed, and compounded. We're excited for a new era, not one of benchmaxing, but of benchmaking. The assumption that the frontier is actually the best performing is just not borne out in practice. Within 24 hours of bringing Nemotron Ultra into our stacks, we found five production tasks where a standard Nemotron Ultra model without post-training beat frontier models. This underscores that a handful of common benchmarks can be gamed. That era, benchmaxing, has ended. The new era is benchmaking. A customer-specific benchmark is not just a scorecard.

It's a hill to climb. It's the normative orientation that directs your entire operational workflows and post-training pipeline. It defines what better means on your terms for your business with your strategy, everything optimizes against it continuously. Because the benchmark is yours, the trade-offs become yours, too. AIP gives you the control plane to trade cost, performance, and latency against each other, and to decide where you run your weights versus theirs, workflow by workflow, continuously. You can have a continuous improvement cycle that compounds your alpha into your weights. AIP was built for this. We continue to see that our product is winning head-to-head. The others are focused on productivity. We are laser-focused on turning tokens into real economic value for our customers. The reality is that the market has created far more intelligence than it has converted into value.

A more powerful model does not solve this problem. The limiting factor is the rate of AIP deployment. A major Silicon Valley tech company recently ran a bake-off, a frontier lab and its deployment team against AIP and our Forward Deployed Engineers. Remember, only Palantir has FDEs. Everyone else has sparkling sales engineers. The lab picked a ticketing automation problem and failed to deliver anything of value against it. We built agent swarms for each of our customers' customers, proactively recommending marketing, packaging, and pricing changes to drive revenue and utilization. This work converted into a $10 million ACV contract. The lab was shown the door. Same customer, same timeline, same models. The only difference was AIP and Palantir's unique FDE tradecraft, it was determinative. It was an incredible quarter in U.S. government, measured not just by 90% year-over-year revenue growth, but by mission impact.

Maven continues to deliver for the Joint Force, from the factory floor to the foxhole. We had our first program in the Maven platform launched this past quarter, where a government program of record chose Maven as the platform that they will operate their program in, taking advantage of our open data standards, ontology, developer tooling, peering, security, and other platform primitives to go faster and deliver seamless experiences and capabilities to the department's chosen command and control platform. Maven has also continued to win as the developer and builder platform for the Joint Force. With over 25,000 builders, uniform service members, civilians, contractors, and companies are developing agents and applications in and on the platform at the speed of war. For all that growth, our Department of War trailing 12-month revenue is still less than 25 basis points of the Pentagon's budget.

Finally, last week, we held our first American Builder Summit in D.C. to celebrate the Americans who stepped forward to join the American Tech Fellowship and to let them make the case that AI is creating jobs and prosperity by sharing their stories and showing what they built. We created ATF because the most transformative applications of AI that we saw were being driven by people without traditional tech backgrounds on literal front lines and factory floors. We now have over 1,000 ATF grads. One of our speakers, Jonah, who joined Tabet as a submarine parts manufacturer 13 years ago, straight onto the factory floor. He's a proud blue-collar worker who still turns wrenches for a living. He built an AI application that took production planning from 30 to 40 days down to less than one. AI alone cannot do that.