Palantir (Minutes): Customers are no longer satisfied with a single scenario but rather with a system restructuring.
The following is a summary compiled by Dolphin Research regarding$Palantir Tech(PLTR.US) FY25Q3 earnings call minutes. For earnings interpretation, please refer to "Palantir: Overvaluation Backlash is Coming"
I. Review of Core Financial Data
Total Revenue: $1.181 billion, up 63% year-over-year, 18% quarter-over-quarter, reaching a historical high, far exceeding expectations.
U.S. Market: Revenue of $883 million, up 77% year-over-year, 20% quarter-over-quarter, accounting for three-quarters of total revenue.
Rule of 40 Score: 114 points, up 20 points quarter-over-quarter, a historical high.
Adjusted Operating Margin: 51%, a record level.
GAAP Net Income: $476 million, with a profit margin of 40%; adjusted free cash flow of $540 million, with a profit margin of 46%.
Commercial Business: Revenue of $548 million, up 73% year-over-year, 22% quarter-over-quarter; U.S. commercial business up 121% year-over-year, 29% quarter-over-quarter.
Government Business: Revenue of $633 million, up 55% year-over-year, 14% quarter-over-quarter.
Total Contract Value (TCV): $2.8 billion, up 151% year-over-year, a historical high.
Q4 2025 Guidance:
Revenue: $1.327 billion–$1.331 billion (quarter-over-quarter +13%, year-over-year +61%). Adjusted operating income: $695 million–$699 million.
FY 2025 Guidance:
Full-year revenue: $4.396 billion–$4.400 billion (year-over-year +53%). U.S. commercial revenue: ≥$1.433 billion (at least +104% year-over-year).
Adjusted operating income: $2.151 billion–$2.155 billion. Adjusted free cash flow: $1.9 billion–$2.1 billion.
Full-year Rule of 40 score raised to 102%.
II. Detailed Information from the Call
2.1 Key Information from Executives
1. Business Growth and Core Drivers
The company's third-quarter performance is "arguably the most outstanding in software company history." The fundamental reasons for strong growth are:
The unique value of the AIP platform—the only system capable of achieving enterprise-level AI applications at scale.
Significant customer ROI—Palantir helps customers earn more profits or enhance battlefield advantages, while customers only pay a portion of the gains.
High unit economics—achieving rapid growth despite a reduced sales team and relatively stable employee size.
2. Explosion of U.S. Commercial Business
U.S. commercial revenue grew 121% year-over-year, 29% quarter-over-quarter, seen as a core growth engine; U.S. commercial TCV grew 342% year-over-year, surpassing the $1 billion mark, becoming the company's fastest-growing business segment.
Case: A medical device manufacturer expanded a multi-year agreement five months after the initial signing, with contract value growing eightfold; the cooperation theme rapidly upgraded from a single application to enterprise-level AI transformation.
More and more executives (CEO level) are directly leading AI transformations, such as the CEO of a leading insurance company personally driving the implementation of AIP.
Palantir is seen by customers as "the only way to achieve AI at scale."
3. Government and Defense Business
U.S. government revenue grew 52% year-over-year, 14% quarter-over-quarter, continuing to provide "critical mission capabilities."
The U.S. military has formally requested all agencies to integrate into the Army's data platform Vantage, based on Foundry and AI, viewing it as a "cultural shift."
The "Warp Speed Program" and "American Tech Talent Program" support manufacturing and reindustrialization, emphasizing AI empowerment for American workers:
Cases include engineers, farm workers, and utility experts using AIP to develop production optimization and energy systems.
Lear Corporation has requested the establishment of an "American Technology Fellow Program" for its employees.
4. Product and Technology Progress
AIP platform's internal native applications are accelerating breakthroughs: new agents can connect data sources, perform integration and transformation, ontology building, and function development.
The "AI Hivemind" module can generate and collaboratively solve complex problems, supporting supply chain optimization, government mission planning, etc.
Edge Ontology supports lightweight mobile operation, integrating with hardware such as drones and robots.
AIP focuses on "enterprise autonomy," emphasizing enhancing AI leverage rather than being controlled by model vendors.
5. Company Philosophy and Competitive Positioning
The company positions itself as "the most representative enterprise software company of our time," with a twenty-year deep moat; "We are the only platform that can bring true transformation to the enterprise AI market." Compared to the market: "Other companies only sell commoditized software, we align directly with customer value."
6. Macro and Social Perspectives
The true beneficiaries of AI should be American workers, not a few capital elites; "The key to GDP growth brought by the AI revolution is whether it can benefit American workers." Palantir's products make industry-knowledgeable workers like factory workers and truck drivers "more valuable" in the AI era.
2.2 Q&A
Q: What is Palantir's unique advantage that others might not understand?
A: The software we build is designed for the real world, not idealized models. The measure of success is not sales, but whether it truly solves the customer's problems. Over the past twenty years, we have continuously built a complete software system, from early medical projects to today's AI Hivemind, reflecting this capability. Our way of working allows us to continuously move towards more complex problems, focusing on the most difficult and valuable parts within enterprises. Because we are always at the forefront of problems, we can continuously strengthen our products and maintain competitiveness. We believe we should always be where "the most valuable problems" are being solved.
Q: Many companies have significantly accelerated their sales cycles after attending Palantir's boot camps. What major changes have you observed?
A: U.S. commercial business has achieved significant growth over the past year, with total transactions reaching $1.3 billion, approximately six times year-over-year. Many orders exceed millions of dollars, with some reaching tens of millions.Current customers no longer focus on a single use case but want to reorganize the entire enterprise around Palantir and AIP.Many corporate executives are proactively driving this transformation, and our core task is to ensure rapid delivery of value.
At the same time, we see the biggest change is: customers want to achieve full transformation within months and require us not only to provide products but also to guide them on how to truly implement AI, Foundry, ontology, and FTE models, etc.
In the past, we needed to work hard to persuade customers to participate, but now they actively seek to complete private equity-level enterprise transformations in the public market. Whether in the U.S. or global government clients, we are directly involved in the most complex, critical, and core issues—these issues themselves are what we are reshaping.
Q: In the commercial aspect, please talk about the changes in customer behavior you have observed—why are they now more willing to adopt Palantir? It's not just about the growth of new customers, but also the migration of existing customers to higher value.
Additionally, with the development of products like AI Agents and AI Foundry (AIP FD), what internal adjustments have you made to meet this accelerated demand?
In the government aspect, U.S. government business growth of over 50% is quite impressive. Can you talk about the main drivers of this growth and the future opportunity accumulation of projects like Golden Dome?
A: On the commercial side, the biggest change we see is a fundamental shift in customer behavior.More and more customers are no longer satisfied with single-point trials or single-scenario deployments but want to reconstruct the entire enterprise's operational system around Palantir and AIP.They proactively ask, "How can we complete a full organizational transformation in a few months?" In the past, we often needed a long time to educate customers, but now customers already have clear AI transformation goals, and they want to implement them quickly and comprehensively. This has significantly shortened sales cycles, and transaction scale and frequency have increased noticeably.
At the customer level, this adoption is forming a network effect: once a company successfully implements it, it will drive other peers and partners to follow suit.Many customers have even formed "learning organizations" internally, proactively training employees to use our platform. Customers are also exchanging experiences with each other, promoting wider use and deeper integration.
Internally, we are also undergoing deep self-reinforcement. For example, we use internal versions of AIP FD to enhance our productivity, embedding development efficiency, data insights, and AI-assisted decision-making directly into operational processes. These tools are also delivered to customers, enabling them to reach similar productivity levels in a very short time.We emphasize making both employees and customers "solvers of real problems," rather than relying on so-called "surface innovation" or "generic AI concepts." Our culture is to stay close to the field, act quickly, and deliver results directly.
Additionally, internally, we are continuously optimizing our go-to-market strategy, ensuring that each deployment team can develop the most suitable landing path for customer needs. This organizational flexibility allows us to respond quickly and expand deployment scale.
In the government business, U.S. government growth of over 50% is an extremely strong signal. The main drivers of demand come from increased real geopolitical and defense needs—in various defense and intelligence projects, the demand for data integration and AI decision-making has become more urgent. Our platform has become a core part of multiple critical mission systems, and new projects (such as Golden Dome) are rapidly accumulating. Overall, the trend we see in the government sector is consistent with the commercial side: customers not only want to acquire tools but also want to reshape the entire system to adapt to AI-driven combat and decision-making models.
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