Summary
Palantir's first quarter of 2022 delivered strong top-line growth but still ended with GAAP losses. Revenue rose 31% year over year to $446.4 million. Gross profit increased 31.8% to $351.95 million, and gross margin edged up 0.6 percentage points to 78.9%. The operating loss narrowed to $39.44 million, and operating margin improved by 24.6 percentage points to negative 8.8%. The net loss narrowed to $101.38 million, while diluted EPS was negative $0.05. On a non-GAAP basis, adjusted income from operations was $117 million, a 26% margin, and adjusted EBITDA was $121.7 million, a 27% margin. Adjusted EPS was $0.02.
The customer base expanded quickly. Customer count reached 277, up 86% year over year from 149. US commercial revenue grew 136%, commercial revenue overall grew 54%, and government revenue grew 16%. Remaining performance obligations jumped 91.7% to $1.20 billion. Deferred revenue was $506.9 million, down 8.2% from the prior-year quarter. Average revenue from the top twenty customers over the trailing twelve months was $44.6 million, up 24% from a year earlier. Contribution margin was 57%, compared with 60% in the prior-year period. Government customers accounted for 54% of revenue and commercial customers 46%. US customers generated 61% of revenue, with non-US customers at 39%.
Cash generation was positive but weaker than a year ago. Operating cash flow was $35.5 million, down 69.6% year over year. Capital expenditures rose to $15.2 million. Adjusted free cash flow was $29.8 million, a 7% margin. The company said the operating cash flow decline was driven by timing of customer payments and timing of payments to vendors. It also said customer billing cycles have continued to normalize and growth in customer collections outpaced cash operating expenses. Management guided to a base case of $470 million in revenue for the second quarter of 2022, with a 20% adjusted operating margin. For the full year 2022, the company continues to expect a 27% adjusted operating margin. Under its long-term policy, it continues to expect annual revenue growth of 30% or greater through 2025.
Risks remain substantial. Palantir flagged a long and unpredictable sales cycle and noted that many contracts include termination for convenience provisions. The company may not realize the full total contract value of its customer contracts. It also pointed to global macroeconomic and geopolitical risks, including Russia's invasion of Ukraine, as well as the possibility of data breaches. Investments in marketable securities and special purpose acquisition companies contributed to unrealized losses that weighed on other income (expense), net. The COVID-19 pandemic has not had a material adverse impact on results to date, though effects remain uncertain. The company expects travel and office-related expenditures to increase but not return to pre-pandemic levels.
The quarter showed healthy demand and improving non-GAAP profitability, but GAAP losses persist and cash flow fell sharply. Revenue growth came from existing customers as they expanded their use of the platforms. The company continues to evaluate investments in special purpose acquisition companies and other entities. The gap between adjusted profitability and GAAP losses remains the central tension in the results.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2022 | Q4 FY2021 | QoQ | Q1 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $446.4M | $432.9M | +3.1% | $341.2M | +30.8% |
| Gross profit | $352.0M | $345.3M | +1.9% | $267.1M | +31.8% |
| Gross margin | 78.8% | 79.8% | -0.9 pp | 78.3% | +0.6 pp |
| Research & development | $88.6M | $84.2M | +5.3% | $98.5M | -10.0% |
| Sales & marketing | $160.5M | $162.6M | -1.3% | $136.1M | +17.9% |
| General & administrative | $142.3M | $157.5M | -9.6% | $146.6M | -2.9% |
| Total operating expenses | $391.4M | $404.2M | -3.2% | $381.1M | +2.7% |
| Operating income (loss) | -$39.4M | -$58.9M | +33.1% | -$114.0M | +65.4% |
| Operating margin | -8.8% | -13.6% | +4.8 pp | -33.4% | +24.6 pp |
| Net income (loss) | -$101.4M | -$156.2M | +35.1% | -$123.5M | +17.9% |
| Net margin | -22.7% | -36.1% | +13.4 pp | -36.2% | +13.5 pp |
| Diluted EPS | -$0.05 | -$0.08 | +$0.03 | -$0.07 | +$0.02 |
| Customers | 277 | — | — | 149 | +85.9% |
| Net retention rate | 131.0% | — | — | — | — |
Risks
Top three customers together accounted for 17% of revenue for the three months ended March 31, 2022 and 20% for the three months ended March 31, 2021, and certain significant customers have reduced spend, terminated agreements, or required refunds, which could cause revenue to decline if relationships are impaired.
The sales cycle often lasts six to nine months but can extend to a year or more, and large sales typically close in the last several weeks of a quarter, making revenue and cash flow difficult to predict.
Government customers represented 54% of revenue for the three months ended March 31, 2022, many contracts may be terminated for convenience, and the U.S. federal government is prohibited from exercising contract options more than one year in advance, creating budget and renewal uncertainty.
The multi-class structure, Founder Voting Trust Agreement, and Founder Voting Agreement concentrate voting power with the Founders, who held approximately 27.1% of voting power excluding Class F common stock as of May 2, 2022, creating potential conflicts and possible index exclusion.
Commercial revenue increased by $71.8 million for the three months ended March 31, 2022 versus the prior-year quarter, including $26.8 million from customers with concurrent Investment Agreements, and other income (expense), net changed by $55.0 million primarily due to unrealized losses on marketable securities, exposing results to investment and related-party customer risk.
Operating cash flow was $35.5 million for the three months ended March 31, 2022, down 69.6% from $116.9 million for the three months ended March 31, 2021, and deferred revenue decreased 8.2% to $506.9 million, reflecting timing of customer payments and potential collections risk.
The company depends on CEO Alexander Karp and other key personnel, and headcount grew to 3,057 full-time employees as of March 31, 2022, increasing challenges in hiring, retaining, and motivating qualified personnel in competitive markets.
The company recently reimplemented its ERP system, which may be disruptive and could impair its ability to timely or accurately prepare financial reports, make payments, or invoice and collect from customers.
SaaS KPIs
All quarters →Adjusted Operating Margin
Adjusted Free Cash Flow Margin
Adjusted free cash flow
Adjusted income from operations
Total Customers
Contribution Margin
Customer count growth (YoY)
Gross margin, excluding stock-based compensation
Summary, forecast, risks and KPIs are extracted from Palantir Technologies Inc.'s SEC filings for Q1 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.