Summary
Palantir's first quarter of fiscal 2026 showed sharp acceleration on the top line. Revenue rose 85% year over year to $1.63 billion. Gross profit was $1.42 billion, and gross margin was 86.8%. Operating income was $754.00 million, and operating margin was 46.2%. Net income was $870.53 million, up 306.7% year over year. Diluted EPS was $0.34, up 325.0% year over year. Those figures point to a business that is growing quickly while producing GAAP profits. The quarter showed a rare combination of rapid growth and high profitability.
Operational momentum was equally strong. Palantir closed 206 deals of at least $1 million, 72 deals of at least $5 million, and 47 deals of at least $10 million. Total contract value was $2.41 billion, up 61% year over year. U.S. commercial total contract value was $1.176 billion, up 45% year over year. U.S. commercial remaining deal value was $4.92 billion, up 112% year over year and 12% quarter over quarter. The company ended the quarter with 1,007 customers, up from 769. Its Rule of 40 score reached 145%.
Cash generation and non-GAAP profitability were also strong. Operating cash flow was $899.16 million, up 189.8% year over year. Capital expenditures were $7.40 million, up 19.7% year over year. Adjusted income from operations was $984 million, a 60% margin, up from a 44% margin. Adjusted free cash flow was $925 million, a 57% margin, up from a 42% margin. Adjusted EBITDA was $990 million, a 61% margin. Contribution margin was 73%, up from 61%. Gross margin excluding stock-based compensation was 88%, up from 82%. Deferred revenue was $929.00 million, up 58.1% year over year, and remaining performance obligations were $4.50 billion, up 136.8% year over year.
Guidance was raised. For the second quarter of fiscal 2026, Palantir expects revenue between $1.797 billion and $1.801 billion and adjusted income from operations between $1.063 billion and $1.067 billion. For the full fiscal year 2026, the company raised revenue guidance to between $7.650 billion and $7.662 billion. It raised U.S. commercial revenue guidance to more than $3.224 billion, representing growth of at least 120%. It raised adjusted income from operations guidance to between $4.440 billion and $4.452 billion and adjusted free cash flow guidance to between $4.2 billion and $4.4 billion. Palantir continues to expect GAAP operating income and net income in each quarter of the year.
Risks remain. Palantir notes that large government customers face uncertainties around budgets, spending levels, and changing priorities, which can make the timing and size of contract awards hard to predict. Many of its contracts include termination for convenience provisions. The company also cites macroeconomic and geopolitical risks, including the Russia-Ukraine conflict, conflicts in Israel and the broader Middle East, tariffs, interest rates, and foreign currency fluctuations. Its international business is exposed to currency moves, particularly in the Euro and British pound sterling, against the U.S. dollar. The company does not have office locations in Russia or Palestinian territories, and none of its revenues came from sales to entities headquartered in those countries or territories.
The quarter's headline growth came with a mix of strong cash conversion and expanding margins. Management is guiding for further growth in the second quarter and the full year. The main watch items are government budget cycles and the durability of commercial demand. Execution on large contracts and expansion within existing customers will determine whether the raised outlook holds.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.63B | $1.41B | +16.0% | $883.9M | +84.7% |
| Gross profit | $1.42B | $1.19B | +19.0% | $710.9M | +99.3% |
| Gross margin | 86.8% | 84.7% | +2.1 pp | 80.4% | +6.3 pp |
| Research & development | $161.0M | $143.6M | +12.1% | $134.9M | +19.3% |
| Sales & marketing | $319.2M | $302.1M | +5.7% | $236.3M | +35.1% |
| General & administrative | $182.6M | $169.8M | +7.6% | $163.6M | +11.6% |
| Total operating expenses | $662.8M | $615.4M | +7.7% | $534.8M | +23.9% |
| Operating income (loss) | $754.0M | $575.4M | +31.0% | $176.0M | +328.3% |
| Operating margin | 46.2% | 40.9% | +5.3 pp | 19.9% | +26.3 pp |
| Net income (loss) | $870.5M | $608.7M | +43.0% | $214.0M | +306.7% |
| Net margin | 53.3% | 43.3% | +10.0 pp | 24.2% | +29.1 pp |
| Diluted EPS | $0.34 | $0.24 | +$0.10 | $0.08 | +$0.26 |
| Customers | 769 | — | — | 769 | ±0.0% |
Risks
Top three customers together accounted for 15% of revenue for the three months ended March 31, 2026 and 18% for the three months ended March 31, 2025. The filing warns that customers representing a material portion of revenue may reduce spend, terminate agreements, or seek less favorable terms, which would disproportionately affect results.
Many customer contracts may be terminated by the customer at any time for convenience, and the U.S. federal government is prohibited from exercising contract options more than one year in advance. Delays in the U.S. government budgeting process, continuing resolutions, or a lapse in appropriations could adversely affect timely revenue recognition.
The company and its peers are investing more significantly in AI, and the filing warns other companies may develop similar products or adopt and implement AI more successfully or at a quicker pace. Failure to develop and deploy AI technologies in a timely and cost-effective manner could cause customers to leave or demand to decline.
The recent escalation of hostilities in Iran has demonstrated intent to target Western technology infrastructure and companies, including Palantir, increasing the risk that systems, facilities, or third-party providers could be subject to physical or cyber attack. Activist protests at company properties and customer sites could also disrupt operations.
As of December 31, 2025, total remaining deal value was $11.2 billion, of which $6.8 billion was commercial and $4.4 billion was government. The company historically has not realized all revenue from full deal value because contracts are subject to termination for convenience, options may not be exercised, and contracts may be renegotiated.
Sales efforts involve considerable time and expense, with the sales cycle often lasting six to nine months and sometimes a year or more. Initial pilot deployments and bootcamps are often provided at no or low cost and may not convert into revenue-generating contracts.
The filing cites uncertainty from inflation, interest rates, monetary policy changes, foreign currency fluctuations, tariffs, and geopolitical tensions including Russia-Ukraine, the Middle East, and recent strikes by the United States and Israel on Iran. MD&A states it does not currently expect these conflicts to have a material impact, but warns customer spending may still be deferred or reduced.
The company is highly dependent on CEO Alexander Karp and other key personnel; all executive officers are at-will employees. Volatility or appreciation in the trading price of Class A common stock may impair the ability to attract and retain personnel with vested equity awards.
The multi-class structure, Founder Voting Trust Agreement, and Founder Voting Agreement concentrate voting power with the Founders and their affiliates. The Ownership Threshold is 100,000,000 Corporation Equity Securities, a small minority of the 2,397,133,206 common shares outstanding as of March 31, 2026, allowing Founders to achieve substantial liquidity without diminishing voting power.
The business is subject to complex and evolving U.S. and non-U.S. laws regarding privacy, data protection, security, and technology protection, including the EU AI Act and FASA. Changes in these laws are listed among factors that may cause quarterly fluctuations.
SaaS KPIs
All quarters →Adjusted Operating Margin
Adjusted Free Cash Flow Margin
Total Customers
Contribution Margin
Rule of 40
Deals of at least $1 million
Deals of at least $10 million
Deals of at least $5 million
U.S. Commercial Remaining Deal Value (RDV)
Gross Margin (excluding stock-based compensation)
Total Contract Value (TCV)
U.S. Commercial Total Contract Value (TCV)
Summary, forecast, risks and KPIs are extracted from Palantir Technologies Inc.'s SEC filings for Q1 FY2026 (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.