Palantir shares fell 7% on Tuesday after the company’s first-quarter earnings failed to impress investors, even as the software firm posted faster growth and raised its outlook for the year.
Revenue jumped 85% in the first three months of this year to $1.63 billion, topping the $1.53 billion consensus estimate. Adjusted earnings per share rose more than 150% to $0.33, also ahead of the $0.28 forecast. The market, though, focused less on the beat and more on whether the pace can keep stretching from here.
Palantir said the majority of its first-quarter revenue, or $1.28 billion, came from the US, where it said business more than doubled over 12 months. The company also lifted full-year revenue guidance to $7.65 billion to $7.66 billion, from a prior range of $7.182 billion to $7.198 billion, and raised its US commercial revenue forecast to $3.22 billion. That forecast implies 120% growth, up from a prior projection of 115%.
Chief Executive Alex Karp leaned into that momentum on the earnings call, saying, “When the whole world said software had to be worthless, we built platforms that work,” and later asking, “How can a company grow 100% in the US with functionally a non-existent salesforce.” The company said it closed 206 deals of at least $1 million last quarter, including 72 deals of at least $5 million and 47 deals of at least $10 million.
The stock reaction shows how high the bar has become for Palantir, which is seen as a beneficiary of US government contracts across agencies including the Pentagon, the Department of Homeland Security, and the US Department of Agriculture. Investors were also weighing the results against growing competition from AI developers OpenAI and Anthropic, while the company has been recovering from an earlier sell-off tied to broader worries that AI could disrupt software business models.
Last month, President Trump gave Palantir a shout-out on social media, praising its “great war fighting capabilities and equipment.” For now, the latest numbers were strong enough to lift forecasts but not strong enough to lift the share price, a reminder that Palantir’s pltr stock price is being judged on far more than growth alone.