Palantir (PLTR.US) FY25 Q4 earnings call: Remaining contract value grew 105% year-on-year to reach $11.2 billion.

Palantir (PLTR.US) held its FY25Q4 financial report conference call. The company's total revenue in the fourth quarter surged 70% year-on-year, marking the highest growth rate since the company went public. The full-year revenue for 2025 increased by 56% year-on-year, reaching $4.475 billion. Adjusted operating profit in the fourth quarter reached $798 million, with a profit margin of 57%. The full-year adjusted operating profit was $2.3 billion, with a profit margin of 50%. The full-year adjusted free cash flow reached $2.3 billion, an 82% year-on-year growth. Total contract value (TCV) reached a historical high of $4.3 billion in the fourth quarter, a 138% year-on-year increase. The number of customers increased by 34% year-on-year, reaching 954. Remaining contract value increased by 105% year-on-year, reaching $11.2 billion. The company's top management stated that this quarter's performance was a "historic breakthrough," demonstrating that high growth and outstanding profitability can coexist. The company has pioneered a "unique niche field" and is the only enterprise software company consciously focused on deploying AI models on a large scale to create real value. The market is entering a phase of distinguishing between "providing cognitive accessibility services" and "using accessible results to achieve scalable empowerment." Palantir focuses on the latter, helping customers transition from "AI adopters" to "AI native enterprises," transforming execution into exponential advantages. True value creation occurs at the top of the technology stack (through AI, ontology, etc.), not at the bottom. The company has achieved extraordinary impact on revenue and profits with relatively small investments, disrupting traditional models. In terms of performance guidance, the company expects revenue to be between $1.532 billion and $1.536 billion in Q1 2026; adjusted operating income is expected to be between $870 million and $874 million. The median revenue for the full year 2026 is expected to be $7.19 billion, a 61% year-on-year increase. It is expected that U.S. commercial business revenue will exceed $3.14 billion, a year-on-year increase of at least 115%. Adjusted operating income for 2026 is expected to be between $4.26 billion and $4.28 billion, while adjusted free cash flow is expected to be between $3.925 billion and $4.125 billion. Q&A Q: How do you view international business? Do you expect it to pick up momentum? For example, due to European rearmament? A: Conducting business outside of the United States presents significant challenges. Currently, the company does not have enough bandwidth to handle complex affairs outside of the U.S., where demand is huge. The core issue is whether allied countries can recognize that they need to purchase products that are much more advanced than their domestic ones, which is complex because they tend to buy domestic products. From a broader perspective, it is necessary to examine whether their procurement systems can support the purchase of the best products. Observations show that Middle Eastern Arab countries, Israel, and China have wide adoption, while Canada, the Nordic countries, and Europe generally lack adoption. The real difficulty the world faces is how Palantir can prove it is reasonable to take on more complex affairs. For example, France has the clearest understanding of the problem, but does not know how to solve it because the solution involves primarily purchasing American products. Furthermore, the company's demand for its products is "magical," not just "the best," and we have already delivered magical projects that can change people's views on U.S. deterrence. Q: Regarding the commercial side, the market believes that 2026 is the year of AI "demonstration," have you seen any dynamic changes among customers or partners? Has the hesitation mentioned previously by enterprises changed? A: Our entire business market entry strategy is to quickly demonstrate and directly deliver value impacts to customers, so we see customers starting and expanding at a larger scale and faster pace. We completed 61 transactions worth over $10 million, because we delivered impacts to customers. In the U.S. market, customers have seen validation points from other companies, not limited to a single use case. Conversations two years ago were more about doubting whether it would work, but now it has shifted to "I heard you accomplished it, but I'm not sure where you fit." Palantir is not a company for one position; people know it works, works well and fast. Many customers now approach with an attitude of "I know it works, what do I need to do to speed up." At the negative end, there is less of "I don't quite understand how or why it will work." We have never been more capable of shaping cooperation partners, with some customers even restructuring their organizations to accommodate our products. We are helping shape the foundation of execution, and this year's goal is to expand this deep collaboration, focusing more on client base density rather than quantity. Q: On the defense side, besides Shipbuilding OS, are there opportunities to develop ammunition or missile OS, and other application areas? A: Industrialization has been a major focus for us in the past two to three years, starting with defense but expanding to pharmaceuticals, data centers, etc., triggering a chain reaction. ShipOS started with submarine fleets, but people requested our help with various weapon systems, including fighter jets, surface vessels, drones, ammunition itself, covering weapons production and maintenance. The ability to integrate lethality and deliver combat power requires integrated capabilities from factory to trenches. Maven is a huge investment that changes the way joint forces fight on the battlefield; ShipOS and its core warp speed will revitalize the factory floor and provide an integrated view to the Pentagon. We have received numerous inquiries on how to promote similar practices within the government. Q: In terms of the commercial sector and government defense projects, are more budgets being allocated to you? In other words, are you now being asked to assume more responsibilities a situation where originally only a specific task was requested, but now more responsibilities are being assumed? Is the budget share you receive increasing with Palantir's involvement? A: If you look closely at our data, you will find that the revenue growth is difficult to explain, but the growth in the number of customers is not surprising. This is because serious customers entrust us with their most important problems, and we create tremendous value as a result. It is not just about getting more problems, but solving them in a way that is decisive for the enterprise, thus yielding higher returns. There is a consensus (right or wrong) that our competitors are not excellent. We maintain close, deep, intensive, and direct relationships with leaders in almost every industry. These relationships are not simply transactional; we provide high-value products and receive compensation in return. For example, our 127 rule, 93% growth in the U.S. market, and the 61% annual performance guidance all prove this. We deliver products on the front lines and receive substantial rewards as a result.