Summary
Palantir's FY2025 second quarter showed broad acceleration across revenue, profit, and cash generation. Revenue was $1.00 billion for the quarter, up 48.0% from the prior-year quarter. Year-to-date revenue was $1.89 billion, up 43.8% from the first six months of 2024. Gross profit was $810.76 million, up 47.5% year over year. Operating income was $269.32 million, up 155.7%, and operating margin was 26.8%, up 11.3 percentage points. Net income was $326.73 million, up 143.6%, while diluted EPS was $0.13, up 116.7% from the prior-year quarter. Gross margin was 80.8%, down 0.3 percentage points. The quarter's growth came with slightly lower gross margin but much higher operating leverage.
The U.S. business drove the quarter. U.S. revenue grew 68% year over year and 17% quarter over quarter. U.S. commercial revenue grew 93% year over year and 20% quarter over quarter. U.S. government revenue grew 53% year over year and 14% quarter over quarter. Total contract value closed was a record $2.27 billion, up 140% year over year. U.S. commercial TCV was $843 million, up 222%. U.S. commercial remaining deal value was $2.79 billion, up 145% year over year and 20% quarter over quarter. Palantir closed 157 deals of at least $1 million, 66 deals of at least $5 million, and 42 deals of at least $10 million. Customer count grew 43% year over year and 10% quarter over quarter. MD&A reports 849 customers at June 30, 2025, compared with 593 a year earlier.
Cash generation was strong. Operating cash flow was $539.25 million for the quarter, up 274.0% from the prior-year quarter. Year-to-date operating cash flow was $849.51 million, up 210.3%. Adjusted free cash flow, a non-GAAP measure, was $568.77 million, or a 57% margin. Adjusted income from operations was $464.39 million, or a 46% margin. Adjusted EBITDA was $470.92 million, or a 47% margin. The press release cites a Rule of 40 score of 94%. Deferred revenue was $685.90 million, up 32.6% from the prior-year quarter. Remaining performance obligations were $2.40 billion, up 71.4%. Capital expenditures were $7.63 million for the quarter, up 165.2%.
Guidance points to continued momentum. For the third quarter of 2025, Palantir guides revenue to between $1.083 billion and $1.087 billion and adjusted income from operations to between $493 million and $497 million. For full-year 2025, the company raised revenue guidance to between $4.142 billion and $4.150 billion. It raised U.S. commercial revenue guidance to in excess of $1.302 billion, representing growth of at least 85%. Full-year adjusted income from operations guidance is between $1.912 billion and $1.920 billion, and adjusted free cash flow guidance is between $1.8 billion and $2.0 billion. Management continues to expect GAAP operating income and net income in each quarter of the year.
Risks remain material. Palantir depends on government budgets and spending priorities, which can shift with regulatory and policy changes. Large government contracts often have uncertain timing and scope. The company's sales cycle is long and unpredictable, and many contracts include termination for convenience provisions. That limits visibility into whether TCV, ACV, and RDV convert into revenue. Macroeconomic and geopolitical tensions, including the Russia-Ukraine and Middle East conflicts, could affect customers and operations. Foreign currency movements, especially in the Euro, British pound, and Japanese yen, can pressure results. The company also cites risks tied to AI use, data access, customer retention, and its ability to develop and deploy new technologies. Those factors temper the quarter's strong headline growth.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.00B | $883.9M | +13.6% | $678.1M | +48.0% |
| Gross profit | $810.8M | $710.9M | +14.0% | $549.6M | +47.5% |
| Gross margin | 80.8% | 80.4% | +0.3 pp | 81.0% | -0.3 pp |
| Research & development | $135.0M | $134.9M | +0.1% | $108.8M | +24.1% |
| Sales & marketing | $243.8M | $236.3M | +3.2% | $196.8M | +23.9% |
| General & administrative | $162.6M | $163.6M | -0.6% | $138.6M | +17.3% |
| Total operating expenses | $541.4M | $534.8M | +1.2% | $444.2M | +21.9% |
| Operating income (loss) | $269.3M | $176.0M | +53.0% | $105.3M | +155.7% |
| Operating margin | 26.8% | 19.9% | +6.9 pp | 15.5% | +11.3 pp |
| Net income (loss) | $326.7M | $214.0M | +52.7% | $134.1M | +143.6% |
| Net margin | 32.5% | 24.2% | +8.3 pp | 19.8% | +12.8 pp |
| Diluted EPS | $0.13 | $0.08 | +$0.05 | $0.06 | +$0.07 |
| Customers | 849 | 769 | +10.4% | 593 | +43.2% |
Risks
Palantir faces competitors investing more significantly in AI, and other companies may adopt and implement AI more successfully or at a quicker pace. Its AIP and other AI features may not gain market acceptance or enhance profitability.
Sales efforts involve considerable time and expense, with a cycle often lasting six to nine months but sometimes a year or more. The company provides pilots and bootcamps at no or low cost, and there is no guarantee of converting them to longer-term revenue-generating contracts.
For the six months ended June 30, 2025, 55% of revenue came from government customers, who are subject to budget and spending uncertainties, continuing resolutions, and potential lapses in appropriations. Many customer contracts permit termination for convenience, and the U.S. federal government cannot exercise contract options more than one year in advance.
The top three customers together accounted for 17% of revenue for the six months ended June 30, 2025 and 2024. If large customers reduce spend or terminate agreements, revenue could decline and results of operations would be adversely impacted.
Inflation, heightened interest rates, monetary policy changes, foreign currency fluctuations, and potential tariffs or trade impacts may cause customers to defer or reduce technology purchases. MD&A notes economic uncertainty could negatively affect new customer acquisition, renewals, and collections.
The company depends on Alexander Karp, CEO and founder, and other key personnel, and all executive officers and many key personnel are at-will employees. Hiring and retaining qualified personnel, especially engineering talent and personnel needing security clearances, may be difficult and costly.
The multi-class structure, Founder Voting Trust Agreement, and Founder Voting Agreement concentrate voting power with the Founders. The Founders can have voting power substantially greater than their economic interests, and future issuances may dilute Class A voting power without diluting Founder voting power.
The company is subject to complex and evolving laws and regulations, including FASA and the EU AI Act. Issues raised by the use of AI, including machine learning and large language models, may result in reputational harm or liability.
SaaS KPIs
All quarters →Adjusted Operating Margin
Adjusted Free Cash Flow Margin
Adjusted free cash flow
Adjusted income from operations
Adjusted EBITDA Margin
Total Customers
Adjusted EBITDA
Contribution Margin
Rule of 40
Customer count growth (YoY)
Gross margin, excluding stock-based compensation
Deals of at least $1 million
Deals of at least $10 million
Deals of at least $5 million
Customer count growth (QoQ)
U.S. Commercial Remaining Deal Value (RDV)
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 Q2 FY2025 (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.