(Bloomberg) — Palantir Technologies Inc. reported quarterly revenue that exceeded analyst expectations and raised its operating profit forecast in the current period, citing strong U.S. demand for its artificial intelligence software.
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The company’s shares rose about 13% in after-hours trading after the report.
Third-quarter revenue rose 30% to $725.5 million, the Denver-based company said in a statement Monday. Analysts estimate an average of $703.7 million, according to data compiled by Bloomberg. Palantir also reported net income of $144 million, a record for the company.
“Our business growth is accelerating and our financial performance is exceeding expectations as we meet relentless demand,” Alex Karp, CEO of Palantir, wrote in a letter to U.S. government and commercial shareholders on Monday. “The world is in the midst of a US-led AI revolution that is reshaping industries and economies, and we are at the center of it.”
The company raised its 2024 revenue guidance to about $2.81 billion. Analysts expected $2.76 billion. The company also reported a substantial increase on a closely watched metric: revenue from its U.S. commercial operations, a key driver of revenue growth. Palantir expects U.S. commercial revenue to rise more than 50% this year to more than $687 million.
Palantir’s stock price soared after introducing new AI tools last year, becoming a top stock of a tech industry frenzy. Its stock price is up more than 140% so far this year, fueled by demand for its AI software and events like its recent inclusion in the S&P 500.
Palantir posted adjusted earnings of 10 cents per share in the period ended September 30, beating analyst expectations of 9 cents. The company forecast fourth-quarter adjusted operating income of about $300 million, compared with the average estimate of $261.6 million.
Although Palantir counts global organizations such as energy giant BP Plc and Britain’s National Health Service among its customers, foreign demand for its AI software is weak compared to that in the US. The company said $499 million of its third-quarter revenue, about 70%, came from U.S. customers.
“The US is the driving force behind the AI revolution we’re seeing,” Chief Revenue Officer Ryan Taylor said during an interview on Monday. Taylor said Palantir closed 104 deals worth more than $1 million in the third quarter, thanks in large part to its unconventional sales strategy of hosting boot camps to teach customers how to use its tools.
