Q2 2026 Palantir Technologies Inc Earnings Call Transcript
Key Points
- Palantir Technologies Inc (PLTR) delivered its highest-ever revenue growth of 93% year-over-year, with US commercial revenue accelerating to 149% growth.
- The company achieved a record Rule of 40 score of 155% and generated $1.22 billion in adjusted free cash flow, surpassing $1 billion milestones in GAAP net income, adjusted free cash flow, and adjusted operating income.
- Closed a record 220 deals worth $1 million or more, including 98 deals over $5 million and 70 deals over $10 million, highlighting strong enterprise demand.
- US commercial TCV bookings surged 153% year-over-year to $2.132 billion, and the company raised its full-year 2026 revenue guidance to $8.154 billion, an 80% growth rate.
- The company's AIP platform is winning head-to-head against frontier labs, with a major Silicon Valley tech company choosing Palantir after a bake-off, converting to a $10 million ACV contract.
- Net dollar retention increased to 157%, up 700 basis points from the prior quarter, indicating strong customer expansion and value realization.
- International commercial revenue growth lagged significantly at 26% year-over-year, compared to the explosive 149% growth in the US commercial segment.
- Adjusted gross margin was impacted by increased costs from taking on cloud hosting for a government customer, which could pressure future margins.
- The company expects a significant ramp in expenses in the third quarter due to seasonality of new hire starts and product initiatives, potentially impacting near-term profitability.
- Revenue from strategic commercial contracts remains minimal at approximately $400,000 for the quarter, representing just 0.02% of overall revenue.
- The company's heavy reliance on US government and commercial growth (81% of total revenue) exposes it to potential budget cuts or policy shifts in the US.
- CEO Alex Karp's aggressive goal to maintain or exceed current US commercial growth rates for the next 18 months may be challenging to sustain given the already high base.
Good afternoon. I'm Ana Soro from Palantir's finance team, and I'd like to welcome you to our second quarter 2026 earnings call. We'll be discussing the results announced in our press release issued after the market close and posted on our Investor Relations website.
During the call, we will make statements regarding our business that may be considered forward-looking within applicable securities laws, including statements regarding our third quarter and fiscal 2026 results management's expectations for our future financial and operational performance and other statements regarding our plans, prospects and expectations.
These statements are not promises or guarantees and are subject to risks and uncertainties, which could cause them to differ materially from actual results. Information concerning those risks is available in our earnings press release distributed after the market closed today and in our SEC filings. We undertake no obligation to update forward-looking statements, except as required by law.
Further, during
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