Palantir’s U.S. commercial revenue reaches $984 million, surpassing government revenue for the first time
Key Facts
Palantir’s U.S. commercial revenue surpassed its U.S. government revenue for the first time, reaching $984 million in the third quarter ended September 30, 2026, compared with $953 million from the government, according to the company’s filing with the U.S. Securities and Exchange Commission. U.S. commercial revenue grew 148% year over year and 29% quarter over quarter, while U.S. government revenue rose 96% year over year and 18% quarter over quarter. Total U.S. revenue was $1.937 billion, up 119% year over year and 23% quarter over quarter. Companywide, total revenue increased to $2.313 billion, up 96% year over year and 20% quarter over quarter, surpassing $2 billion for the first time. The figures show U.S. commercial revenue moving ahead of government revenue even as both segments continued to post strong growth during the quarter.
Chief Executive Alex Karp said the 29% quarter-over-quarter growth in U.S. commercial revenue "would have been an astonishing annual growth rate for any public software company in the United States." The number of U.S. commercial customers rose to 686, up 29% year over year and 5% quarter over quarter, according to the earnings-call transcript published on Investing.com. Management said demand for its "sovereign AI" offering is supporting momentum in U.S. commercial revenue and helped it surpass government revenue for the first time. The company added that it signed several eight-figure contracts during the quarter, with shorter-than-usual timelines as customers adopted the offering’s initial capabilities. International commercial revenue was $184 million, up 21% year over year and 1% quarter over quarter.
Growth during the quarter was not limited to U.S. commercial revenue: total government revenue reached $1.146 billion, surpassing $1 billion for the first time, with growth of 81% year over year and 16% quarter over quarter. The company recorded 212 deals with a contract value of at least $1 million, including 107 deals of at least $5 million and 64 deals of at least $10 million. Total contract value was $2.918 billion, up 6% year over year, while U.S. commercial contract value reached $1.463 billion, up 11%. U.S. commercial remaining deal value was $6.517 billion at quarter-end, up 79% year over year and 4% quarter over quarter. The company cautioned that total contract value does not necessarily convert fully into revenue, citing contractual options and periods terminable without cause, as well as long and difficult-to-predict sales cycles.
The GAAP operating margin was 47%, while the adjusted margin reached 62%, according to the earnings release. Company data showed net revenue retention at 165%, an increase of 8 percentage points from the previous quarter. For the next quarter, Palantir forecast fourth-quarter 2026 revenue of between $2.649 billion and $2.653 billion, and adjusted operating income of between $1.640 billion and $1.644 billion. It also raised its 2026 revenue forecast to a range of $8.530–$8.534 billion. The company expects U.S. commercial revenue to exceed $3.559 billion for the year, with growth of at least 143%.
The results topped analysts’ average revenue estimate of $2.18 billion, as the company reported $2.31 billion, according to Reuters via MarketScreener. Still, the stock fell 3.08% in regular trading on the day results were announced and dropped 3.82% after the close, according to Investing.com, despite beating revenue and earnings-per-share estimates. The stock closed at $178.34 on November 2, according to EL7 data. In trading on Tuesday, November 3, the stock was down 1.5% by about 11 a.m. Eastern time, despite reporting better-than-expected earnings, the Associated Press reported. The moves put the market’s reaction in the following session in the context of the company’s higher outlook for the fourth quarter and the year, without changing the quarterly figures it reported.