Palantir Technologies (NASDAQ: PLTR) delivered a quarter that makes 'beat' feel understated. Revenue hit $1.935 billion, 93% above the prior year and 6.7% above consensus estimates of $1.812 billion. Adjusted EPS of $0.41 cleared the $0.34 estimate by 19%. The company raised its full-year revenue guidance to $8.150–$8.158 billion, implying 82% Y/Y growth, and lifted its U.S. commercial revenue target to at least $3.424 billion, or 134% Y/Y growth.
The headline numbers are striking. The composition matters more. U.S. commercial revenue grew 149% Y/Y to $764 million, while U.S. government revenue rose 90% to $809 million. Total U.S. revenue of $1.573 billion grew 115% Y/Y and 23% sequentially. This is not a government-dependent story anymore: U.S. commercial now represents 39% of total revenue, up from 31% a year ago.
The deal flow separates this quarter from a typical software beat. Palantir closed 220 deals worth at least $1 million, 98 deals of at least $5 million, and 73 deals of at least $10 million. Total contract value (TCV) booked reached $3.373 billion, up 49% Y/Y. The standout was U.S. commercial TCV at $2.132 billion, a record, up 153% Y/Y. U.S. commercial remaining deal value (RDV) hit $6.238 billion, up 124% Y/Y and 27% sequentially. These are expanding relationships and new logos, not one-off renewals.
Profitability scaled with revenue. GAAP operating margin reached 47%, up from 27% a year ago. Adjusted operating margin hit 62%, producing a Rule of 40 score of 155% (93% revenue growth plus 62% adjusted operating margin). GAAP net income was $1.062 billion, a 55% margin. Cash from operations was $1.216 billion, a 63% margin. Adjusted free cash flow was $1.220 billion, also a 63% margin. The company ended the quarter with $9.2 billion in cash, cash equivalents, and short-term Treasuries.
Stock-based compensation was $265 million in the quarter, up from $160 million a year ago, representing 13.7% of revenue. That's down from 15.9% a year ago, so dilution is improving as revenue grows faster than equity grants. The diluted share count rose only modestly to 2.569 billion from 2.563 billion a year ago, suggesting buybacks or lower option exercises are offsetting new grants.
The guidance raise is the most telling signal. Q3 revenue guidance of $2.160–$2.164 billion implies 76% Y/Y growth at the midpoint, decelerating from Q2's 93% but still extraordinary. The full-year revenue raise to $8.150–$8.158 billion implies Q4 revenue of roughly $2.422–$2.434 billion, or about 72% Y/Y growth. The deceleration is baked in. The absolute dollar growth is accelerating: the company added $932 million in revenue Y/Y in Q2 and is guiding to add roughly $1.0 billion in Q4. This is not a company hitting a ceiling.
Whether the U.S. commercial TCV record translates into sustained revenue growth or reflects a pull-forward of demand is the key question. The 124% Y/Y growth in U.S. commercial RDV suggests the pipeline is still building, not exhausting. The raised U.S. commercial revenue guidance of at least $3.424 billion implies Q4 U.S. commercial revenue of roughly $960 million, or about 110% Y/Y growth. If that holds, Palantir will have grown U.S. commercial revenue at triple-digit rates for four consecutive quarters. This is not a cyclical spike; it is structural adoption of AI platforms by enterprises moving past pilots into production.