Alex Karp, CEO of Palantir, arrives ahead of a Tech For Good meeting at the Hotel Marigny in Paris on May 15, 2019 to discuss good behavior for tech giants.
Bertrand Guay | AFP | Getty Images
Palantir reported a fourth quarter loss on Tuesday as sales exceeded analysts’ expectations.
Palantir’s shares were down more than 9% in premarket trading.
Here are the key numbers:
- Revenue: According to a refinitive poll of analysts, it is expected to be $ 322 million versus $ 300.7 million
- Loss per share: 8 cents, which is not comparable to estimates
The company said the average revenue per customer for 2020 was $ 7.9 million, up 41% from 2019. The top 20 customers averaged $ 33.2 million in 2020, up 34% year over year.
In the fourth quarter, Palantir said 21 transactions were completed with a total order value of $ 5 million or more, including 12 with a value of $ 10 million or more. New contracts in the fourth quarter include contracts with the U.S. Army, the U.S. Food and Drug Administration, and PG&E.
Palantir expects sales of 4 billion US dollars in 2025. In 2021, Palantir expects sales to grow by more than 30%. Sales growth of 45% is expected for the first quarter of the year.
In a recorded video that was posted on the company’s earnings webcast, CEO Alex Karp highlighted the company’s long-term prospects.
“We hope that those of you who are current investors stay with us, and those of you who prefer a shorter-term focus, that you choose companies that are more suitable for you,” he said.
The close-knit government contractor debuted in September via a direct listing on the New York Stock Exchange with an opening deal of $ 10 per share. That gave it a market cap of $ 16.5 billion. Palantir has more than tripled since then. The stock closed at $ 31.91 on Friday, for a market cap of $ 52.6 billion.
Palantir is committed to differentiating itself from other Silicon Valley-born technology companies. In a letter to investors in his prospectus to go public, Karp said while Palantir started out in Silicon Valley, “we seem to share less and less of the values and commitments of the technology sector.” Karp said the company has “repeatedly turned down opportunities to sell, collect, or mine data” as opposed to those that “are based on advertising dollars.” The company has announced that it will move its headquarters from Palo Alto, California to Denver.
Palantir was more willing to work with government agencies during Donald Trump’s presidency than other California-based tech companies, which have received significant setbacks from their employees on such contracts. Amazon, Google and Microsoft employees have urged the company to withdraw from contracts with agencies and military departments such as the U.S. Immigration and Customs Service, Customs and Border Protection, and the Army.
In contrast, Palantir has largely built its business on lucrative government deals for its data analytics software, including with ICE. However, the company has also stated that it generally would not do business “with customers or governments whose positions or actions we believe are inconsistent with our mission to support Western liberal democracy and its strategic allies.”
The company also serves commercial customers who make up less than half of the business. Palantir reported in its first earnings release that 56% of its sales in the third quarter came from the government segment, which has grown faster than the commercial business.
Palantir said its government segment had fourth quarter revenue of $ 190 million, up 85% year over year. The commercial segment raised $ 132 million, up 4% year over year.
Palantir did not provide an updated customer base this time around or in its first earnings release in November after it was announced in its prospectus that it had 125 customers in the first half of the year. However, the customer concentration has decreased. 61% of sales in the third quarter came from the top 20 customers, up from 68% in the same period in 2019.
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