Palantir reported better-than-expected first-quarter results, while increasing its full-2023 guidance. Meanwhile, the company continues to push hard for its recently announced artificial intelligence platform, which she calls AIP.
The title flew at the end of the session on Monday.
“We are using all our resources to seize one of the greatest opportunities in the world,” Karp said in an interview with barrons. And he said they intended to do so while remaining profitable under generally accepted accounting rules.
Karp added in a quarterly letter to shareholders that big language models, which are at the heart of generative AI tools, will “transform” enterprise software.
“The depth of engagement and demand for our new AI platform is unprecedented,” he wrote. The first version of AIP will be made available to select customers this month, Palantir said (ticker: PLTR).
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Palantir, which provides analytics software to commercial and government customers, reported first-quarter revenue of $525 million, up 18% from a year ago, outpacing both the the company’s guidance range of $503 million to $507 million and the Wall Street consensus forecast of $506 million. On an adjusted basis, the company earned 5 cents per share, a penny better than Wall Street estimates.
The company posted GAAP net income of $17 million, or one penny a share, the second consecutive quarter that Palantir was profitable under GAAP. Adjusted operating profit of $125 million was above the company’s guidance range of $91 million to $95 million. Adjusted free cash flow was $189 million, a quarterly record for Palantir.
Trading revenue for the quarter was $236 million, up 15% from a year earlier, and ahead of the Wall Street consensus forecast of $217 million, as tracked by FactSet. Chief Financial Officer David Glazer said in an interview that U.S. trading revenue increased 39% sequentially from the December quarter, surpassing the $100 million level for the first time.
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Government revenue was $289 million, up 20%, matching Wall Street estimates, including $230 million in US government revenue, up 22%. Glazer said the results also reflect “discipline on the spending side.”
The company said customer numbers were up 41% from a year ago and 7% sequentially.
For the second quarter, Palantir expects revenue of $528 million to $532 million, slightly below the consensus forecast of $537 million, with adjusted operating income of $118 million to $122 million. The company expects to be profitable again on a GAAP basis in the June quarter and to remain profitable on that basis in the third and fourth quarters.
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Palantir now expects annual revenue of $2.185 billion to $2.235 billion, a slight increase from the company’s previous guidance of $2.18 billion to $2.23 billion. The company now sees full-year adjusted operating profit of $506 million to $556 million, down from a previous range of $481 million to $531 million.
In his letter, Karp addressed some of the current security and privacy concerns around generative artificial intelligence and large language models. “We have intentionally designed our software around the involvement and supervision of human operators before real-world action, including, for example, targeting operations in the military context, can be undertaken” , he wrote. “The machine must remain subordinate to its creator.”
Talk with barronsKarp asserted that Palantir’s platform will be independent of the language model large customers want to use – and that the company’s software will help commercial and government customers unlock the value of their data, “whether it’s it’s about altering your supply chain or taking someone’s life”. a reference to the company’s considerable dealings with defense and intelligence agencies.
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Karp, who was performing Tai Chi moves during an interview via video conference from company headquarters in Denver, said the AI is “usually unique” but “nobody knows where it’s going to land and when it’s going to land.” becomes dangerous”.
He also claims that “very few people have a useful product in this area” and that there is a “subset of people who want to slow it down.” He is not one of them.
Palantir shares jumped 27% in late trading after the earnings announcement. They were up about 4% in Monday’s regular session. The title is up 20% since the start of the year.
Write to Eric J. Savitz at eric.savitz@barrons.com