Big data firm Palantir (NASDAQ:PLTR) released their second quarter earnings report this morning, which surpassed Wallstreet expectations. The company beat revenue expectations by 6.8%, with 20 additional customers added in Q2.
Palantir stock has remained extremely popular amongst retail and institutional investors over the past year.
PLTR stock has gained 135% since its debut on Wallstreet, also exceeding price target averages from analysts. With Q2 results now public, this article will breakdown three key points investors can take away from Palantir’s second quarter earnings.
Palantir reported revenue growth of 49% YOY
Firstly, Palantir recorded $376 million in quarterly revenue, an improvement of 49% YOY. This total brings the half year revenue to $717 million, also a YOY improvement of 49%. So what was the key driver in boosted Q2 revenue?
Palantir’s strong Q2 revenue was supported by exponential growth in the companies US commercial revenue segment, which grew by 90% year-over-year. The boost in commercial revenue will give investors some confidence. Why is this?
Over the past 2 quarters, some Bears have cautioned Palantir’s reliance on Government contracts. With improved commercial revenue in Q2, the spread across the companies total revenue can experience some diversification benefits.
In addition, Q2 total contract value booked grew by 175% year-over-year to $925 million, bolstering the companies revenue visibility. Furthermore, Palantir’s long term revenue visibility is also improving, as total deal value increased by 63% to $3.4 billion Q2.
Palantir’s customer base continues to expand
Palantir secured 20 new customers in the second quarter of 2021. The company also saw customer growth in the commercial space in Q2. Commercial customer growth was up by 32% quarter-over-quarter. The average revenue generated from Palantir’s top 20 customers also grew by 8.3% quarter-on-quarter.
In the Government space, Palantir signed new deals with the US Army, Air Force, and Coast Guard. This includes a two-year, $100 million deal with United States Special Operations Command. Total Government revenue for Q2 equated to $232 Million, a 66% YOY improvement.
Palantir provides guidance for Q3
In the next quarter, Palantir expects to generate $385 Million in total revenue. For the remainder of 2021, Palantir expects $300M+ in Adjusted Free Cash Flow, doubling the companies previous guidance.
But here’s where it gets interesting. The company forecasts 30%+ annual revenue growth for 2021 through to 2024. Rarely do companies provide long term guidance of this nature. Hence, we can expect investors to rally behind the stock possibly ending the companies recent drought.
The Bottom Line – Palantir Q2 earnings
Overall, the companies strong revenue performance alongside its growing customer base are two key factors investors will be taking away from the earnings. In addition, the bullish guidance provided illuminates the companies confidence in its ability to maintain strong revenue growth YOY.
If you want to see more Palantir content from us, see the Palantir stock forecast article below.
Written by Tyger Fitzpatrick, Founder of Youth Investment Group.
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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