Palantir Technologies reported stronger first-quarter results as revenue and adjusted profit came in above market estimates. The company also raised its full-year revenue forecast, supported by growth across US commercial and government clients. The stock moved lower before Tuesday’s open as sentiment weighed the strong results against concerns about valuation.
Palantir reported first-quarter revenue of $1.63 billion, up 85% from the same period last year. The result came above analyst estimates of about $1.53 billion to $1.54 billion, based on Bloomberg and LSEG data.
The US remained the company’s largest market during the quarter. Revenue from the US reached $1.28 billion, after the business more than doubled over 12 months. Chief Executive Officer Alex Karp said, “The United States remains the center, the constant core, of our business.”
US commercial revenue rose 133% year over year to $595 million. US government revenue increased 84% to $687 million, helped by demand from defense, intelligence, and federal customers.
Palantir also reported strong deal activity. The company closed 206 contracts worth at least $1 million during the quarter. It also signed 72 deals worth at least $5 million.
Adjusted earnings per share rose to $0.33 in the first quarter. That figure beat analyst estimates of $0.28 and marked a sharp increase from last year.
Palantir also reported adjusted operating income of $984 million. The company said its Rule of 40 score reached 145%, a metric that combines revenue growth and adjusted operating margin.
The company lifted its full-year 2026 revenue forecast to between $7.65 billion and $7.66 billion. Its earlier forecast stood between $7.18 billion and $7.20 billion. The new outlook came above market expectations.
Palantir also raised its full-year adjusted operating income forecast to between $4.440 billion and $4.452 billion. It expects adjusted free cash flow of $4.2 billion to $4.4 billion.
Palantir’s government business continues to draw attention because of its work with US agencies. The company sells data analytics and artificial intelligence software to departments involved in defense and intelligence.
Reportedly, the Pentagon expanded its use of Palantir’s Maven artificial intelligence system in March. The system helps analyze battlefield data and supports targeting and command decisions.
The company has also expanded its commercial customer base. Market reports named NVIDIA, Airbus, and Stellantis among major corporate clients using Palantir’s platforms.
During the earnings call, Karp questioned critics who doubted the company’s software model. He said, “When the whole world said software had to be worthless, we built platforms that work.”
Palantir shares closed at $146.03 on Monday, up 1.36%. However, the stock fell in premarket trading on Tuesday, moving near $142.61, down 2.34%.
The decline came despite the earnings beat and stronger guidance. Analysts pointed to valuation as a key area of debate after the stock’s rise.
Jefferies analysts said the company’s fundamentals remained strong, but they raised concerns about the share price. They said, “PLTR’s fundamentals are exceptional, but the stock requires a heroic durability assumption to justify the current multiple.”
Oppenheimer recently started coverage with an Outperform rating. However, the market reaction showed that investors still monitored spending plans and revenue durability.