© Reuters. Palantir logo is seen near computer motherboard in this illustration taken January 8, 2024. REUTERS/Dado Ruvic/Illustration/File Photo
(Corrects to “Monday” from “Tuesday” in first paragraph of Feb. 5 story)
By Arsheeya Bajwa
(Reuters) -Palantir Technologies forecast 2024 profit above Wall Street estimates and reported its “first profitable year” on Monday on strong demand for its AI offerings, sending the data analytics company’s shares up more than 19% in extended trading.
Enterprises are prioritizing AI adoption and that is helping demand for Palantir (NYSE:)’s products including its artificial intelligence program, which CEO Alex Karp says is the “future” of the company.
Palantir’s stock rose nearly 3 fold in 2023 on AI boost, compared with the tech-heavy ‘s 53.8% gain.
The company signed 103 deals of over $1 million each in the fourth quarter ended Dec. 31, Chief Revenue Officer Ryan Taylor told Reuters.
U.S. commercial revenue surged 70% to $131 million, compared with a 12% increase a year earlier. Total commercial revenue of $284 million beat LSEG estimates.
Commercial growth suggests “a growing mix of commercial versus government going forward, especially given the guidance,” said RBC Capital Markets analyst Rishi Jaluria.
Palantir expects 2024 U.S. commercial revenue to grow at least 40%, compared with a 36% rise in 2023.
Growth at its mainstay government segment, which contributed more than half of total fourth-quarter revenue, has continued to slow. Government revenue grew 11% compared with a 23% jump a year earlier.
“Some of this (weakness) is due to the continuing resolution and timing of large potential contract awards. But it’s also a function of the department’s pace of scaling their AI and software efforts,” Taylor said.
Analysts have flagged uncertainty in the recognition of revenue from government deals, as revenue from them likely shows up in the company’s books without much consistency.
The company forecast adjusted 2024 profit between $834 million and $850 million, above estimates, while its revenue forecast was in line with estimates.
Palantir reported a record profit of $209.8 million in 2023, which CEO Karp said was the company’s first profitable year since its founding.
