TenQ

The Palantir story

Palantir builds software for government and enterprise operations, with its expansion hinging on whether commercial AI adoption can sustain rapid growth alongside its government business.

Written from Palantir's own filings with the SEC, and rewritten when it publishes a new earnings release. Updated 2026-09-30.

  • $187.48share price, last close
  • $450.5Bmarket value
  • 28/36TenQ Score checks passed
  • 38.5%growth a year the price assumes

The story in brief

  • Commercial growth accelerates. In the quarter to June 2026, U.S. commercial revenue grew 149% from a year earlier to $764 million, alongside U.S. government revenue growth of 90% to $809 million.
  • Profitability extends beyond adjustments. Palantir generated $912 million of GAAP operating income at a 47% margin in the quarter to June 2026, compared with a 62% adjusted operating margin.
  • Stock pay matters. Over the last twelve months, Palantir generated $3.4 billion of free cash flow while recording $836 million of stock-based pay.

What drives the business

  • Palantir has expanded from software for U.S. intelligence operations into enterprise data and AI workflows, though government customers still accounted for 54% of its $4.5 billion in revenue in 2025.
  • Gotham supports defense and intelligence missions, Foundry connects organizational data and operations, AIP brings AI models into those workflows, and Apollo manages software deployment across computing environments.
  • All commercial customers use Foundry, while AIP bootcamps demonstrate workflows on customer data in days and a strategic partnership with Fujitsu Limited incorporates Foundry and AIP into Fujitsu Uvance.
  • Expansion within large accounts is an important growth engine: average revenue from the top twenty customers reached $93.9 million in 2025, compared with $64.6 million in 2024.
  • In the quarter to June 2026, Palantir closed 220 deals of at least $1 million and $2.132 billion of U.S. commercial total contract value, up 153% from a year earlier.

What the price assumes

At $187.48 per share, the reverse DCF implies free cash flow after stock pay grows 38.5% a year for ten years, using a 10.2% discount rate.

Palantir delivered 153.1% annual growth on that measure over the last 2 fiscal years, while the TenQ check sets a 78.5% bar by slowing that record halfway toward 4%.

The implied growth rate passes that check, but the short historical record contrasts with a decade of assumed expansion, and the free cash flow yield is 0.7%.

Value PLTR on your own assumptions

What could change the story

  • Total contract value and remaining deal value assume customers exercise all options and do not terminate contracts, although most contracts have termination provisions, including for convenience.
  • Long and unpredictable sales cycles and complex implementations can interrupt the conversion of commercial demand into recognized revenue.
  • Shares increased 24.3% over the last 3 years, making dilution a continuing consideration alongside the cash generated by the business.
  • The 0.7% free cash flow yield falls below its historical 0.9% and the TenQ check's 3.0% threshold, while the 0.6% earnings yield trails the 5.2% Treasury yield.
  • Competition includes customers' internal software projects, enterprise software companies and government contractors, with data security, privacy and deployment speed among the deciding factors.

What to watch next

  • For the quarter to September 2026, Palantir expects revenue of $2.160 billion to $2.164 billion and adjusted operating income of $1.292 billion to $1.296 billion.
  • For 2026, revenue guidance is $8.150 billion to $8.158 billion, including U.S. commercial revenue in excess of $3.424 billion and growth of at least 134%.
  • U.S. commercial remaining deal value of $6.238 billion at June 2026 provides a reference point for tracking contract expansion alongside recognized revenue.
  • The next releases will also show progress toward 2026 adjusted free cash flow guidance of $4.5 billion to $4.7 billion, with GAAP margins and stock pay distinguishing operating performance from adjusted results.

Sources

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