- Palantir had an exceptional Q4 2024, beating revenue expectations and accelerating growth, especially in the U.S. market.
- They see the “AI revolution” transforming how organizations operate, with AIP at the center of producing tangible, high-value outcomes from large language models (LLMs).
- Management believes they are “at the dawn of a revolution,” positioning Palantir as a leader in enterprise AI implementations.
- Key Growth Numbers & Financial Highlights
- Q4 revenue grew 36% YoY and 14% sequentially to reach $828M.
- Full-year 2024 revenue grew 29% YoY to $2.87B.
- U.S. revenue grew 38% YoY to $1.9B in 2024.
- Rule of 40 score reached 81 in Q4—the highest Palantir has reported.
- Adjusted free cash flow: $1.25B for 2024, a 44% margin.
- Expect continued GAAP profitability in every quarter of 2025.
- U.S. Commercial & Government Outperformance
- U.S. commercial revenue in Q4 grew 64% YoY and 20% sequentially.
- U.S. government revenue grew 45% YoY and 7% sequentially.
- Palantir is rapidly expanding in U.S. manufacturing and defense, with “modern re-industrialization” initiatives and strong momentum in CJADC2 (Joint All-Domain Command and Control) and Project Maven for the DoD.
- International Divergence
- International commercial revenue grew a modest 3% YoY, though it spiked 15% sequentially in Q4 (partly due to revenue catch-up in Asia).
- Management contrasts U.S. customers’ rapid AI adoption with slower progress in Europe: “...in Europe, people are reading 50-year-old playbooks on how to do technology installations.”
- AIP & Ontology
- Ontology is described as the critical layer that integrates an organization’s data and processes, enabling LLMs to deliver reliable, operational results.
- Palantir sees other players “stuck on the model side” while they focus on “AI demand”—i.e., integrating LLMs into real-world workflows.
- “Chat was always a dead end… Instead, we viewed LLMs as a new runtime for AI labor.”
- “Ontology ends up being the intermediary representation that makes your enterprise accessible to AI.”
- Notable Customer Wins & Use Cases
- An American pharmacy chain signed a $67M TCV deal to automate prescription fulfillment and patient outreach.
- A telecom expanded by $40M TCV for managing decommissioning of network equipment.
- An insurance firm cut underwriting from two weeks to three hours, prompting an $11M ACV expansion.
- Panasonic Energy uses AIP to maintain 5.5M batteries/day, boosting throughput.
- “In this AI revolution, the biggest risk is not moving fast enough.”
- Defense & Government Focus
- Warp Speed is Palantir’s manufacturing operating system, used by defense manufacturers like Anduril and L3Harris.
- FedStart provides FedRAMP High compliance for software companies entering the federal space—“radical acceleration” in time and cost savings.
- Palantir credits Project Maven and U.S. Special Operations expansions for fueling 45% YoY growth in U.S. government work.
- China’s DeepSeek R1 & AI Arms Race
- Palantir leadership asserts “the models are commoditizing,” and DeepSeek R1 exemplifies that the cost of inference is dropping fast.
- They argue the West is in a “whole-of-nation effort” to out-innovate China: “M-Day was yesterday. The time to mobilize has come.”
- Palantir’s success weaves together:
- Product investment (ontology, AI integration, Warp Speed).
- U.S. government relationships (defense, intelligence, healthcare).
- Commercial breakthroughs (rapid expansions in AI-driven pilots).
- Cultural stance: moral commitment to serving the West, a “long bet” on the U.S.