Summary
Palantir's fourth quarter of fiscal 2022 produced the company's first quarter of positive GAAP net income, a shift that came with modest top-line growth. Revenue was $508.6 million for the quarter, up 17.5% year over year. Full-year revenue reached $1.91 billion, up 23.6%. Gross profit was $404.3 million for the quarter, up 17.1%, and $1.50 billion for the full year, up 24.5%. Gross margin was 79.5% in the quarter, down 0.3 percentage points, while full-year gross margin was 78.6%, up 0.6 percentage points.
The profit picture improved sharply. Operating loss was $17.8 million for the quarter, a 69.8% narrowing year over year. Operating margin was -3.5%, up 10.1 percentage points. Net income was $30.9 million for the quarter, a swing to a profit and an increase of 119.8%. For the full year, operating loss was $161.2 million, a 60.8% narrowing, and operating margin was -8.5%, up 18.2 percentage points. Full-year net loss was $373.7 million, a 28.2% narrowing, and diluted loss per share was $0.18, a 33.3% narrowing. Adjusted income from operations, a non-GAAP measure, was $114 million for the quarter and $421 million for the full year.
Cash generation declined from the prior-year levels. Operating cash flow was $78.8 million for the quarter, down 15.7% year over year. Full-year operating cash flow was $223.7 million, down 33.0%. Adjusted free cash flow, a non-GAAP measure, was $75.8 million for the quarter and $203.0 million for the full year. Capital expenditures were $4.9 million for the quarter, down 15.8%, and $40.0 million for the full year, up 217.0%. Deferred revenue was $339.2 million, down 26.8%. Remaining performance obligations were $972.7 million, down 11.6%. Total remaining deal value, a non-GAAP metric, was $3.7 billion as of December 31, 2022, down 3% from December 31, 2021; commercial total remaining deal value was $2.0 billion, down 23%, while government total remaining deal value was $1.7 billion, up 37%.
Operational metrics showed customer expansion even as backlog softened. Customer count grew 55% year over year and 9% quarter over quarter. US commercial customer count increased 79%, from 80 customers in the fourth quarter of 2021 to 143 customers in the fourth quarter of 2022. The dollar-weighted average contract duration was 2.8 years as of December 31, 2022. On guidance, management pointed to adjusted income from operations of $91 million to $95 million for the first quarter of 2023. For the full year 2023, it guided adjusted income from operations of $481 million to $531 million and said it expects GAAP net income.
The quarter also carried familiar risks. Management cited macroeconomic events, foreign currency fluctuations, rising inflation and interest rates, and the ongoing Russia-Ukraine conflict. The 10-K notes that revenue growth slowed compared with the prior year because of increased delays in the completion of the U.S. government budgeting process. Many contracts are subject to termination for convenience, and government contract options cannot be exercised more than one year in advance. Early- and growth-stage commercial customers may be unable to generate sufficient revenue or access financing, which could affect collections. Long and unpredictable sales cycles and the difficulty of realizing total contract value remain live issues for the business.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2022 | Q3 FY2022 | QoQ | Q4 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $508.6M | $477.9M | +6.4% | $432.9M | +17.5% |
| Gross profit | $404.3M | $370.3M | +9.2% | $345.3M | +17.1% |
| Gross margin | 79.5% | 77.5% | +2.0 pp | 79.8% | -0.3 pp |
| Research & development | $82.0M | $100.9M | -18.7% | $84.2M | -2.5% |
| Sales & marketing | $190.2M | $182.9M | +4.0% | $162.6M | +17.0% |
| General & administrative | $149.9M | $148.7M | +0.8% | $157.5M | -4.8% |
| Total operating expenses | $422.1M | $432.5M | -2.4% | $404.2M | +4.4% |
| Operating income (loss) | -$17.8M | -$62.2M | +71.3% | -$58.9M | +69.8% |
| Operating margin | -3.5% | -13.0% | +9.5 pp | -13.6% | +10.1 pp |
| Net income (loss) | $30.9M | -$123.9M | +124.9% | -$156.2M | +119.8% |
| Net margin | 6.1% | -25.9% | +32.0 pp | -36.1% | +42.1 pp |
| Diluted EPS | -$0.18 | -$0.06 | -$0.12 | -$0.08 | -$0.10 |
Risks
The 10-K states revenue growth has declined in recent periods and may continue to decline; MD&A notes FY2022 revenue growth slowed compared to the prior year as a result of increased delays in the U.S. government budgeting process.
In FY2022, 56% of revenue came from government customers; delays in the U.S. government budgeting process, continuing resolutions, and potential appropriations lapses could adversely affect timely revenue recognition, and MD&A attributes slower FY2022 revenue growth to increased U.S. government budgeting delays.
Total remaining deal value was $3.7 billion as of December 31, 2022, down 3% from December 31, 2021; commercial remaining deal value fell 23% to $2.0 billion, and many contracts remain subject to termination for convenience.
Current macroeconomic conditions may adversely impact customers, particularly early- and growth-stage customers, and may continue to impact the company's ability to realize the full value of commercial contracts and collections; risk factors cite inflation, rising interest rates, and recession fears.
Other than Q4 2022, the company has incurred losses in each period since inception; FY2022 operating loss was $161.2 million and net loss attributable to common stockholders was $373.7 million, and operating expenses are expected to continue increasing.
The top three customers together accounted for 17% and 18% of revenue for the years ended December 31, 2022 and 2021, respectively; certain significant customers have reduced spend, terminated agreements, or required refunds of previously paid amounts.
Sales efforts involve considerable time and expense, with a sales cycle that often lasts six to nine months but can extend to a year or more; the company typically closes a large portion of sales in the last several weeks of a quarter, making results difficult to predict.
Other income (expense), net changed by $140.7 million for FY2022 compared to 2021 primarily due to $272.1 million of net unrealized and realized losses from investments in marketable securities; the company may not realize a return on strategic investments.
The company depends on Alexander Karp, its CEO, and other key personnel; all executive officers and many key personnel are at-will employees, and the company faces intense competition for engineering and sales talent in major U.S. and non-U.S. markets.
The multi-class structure, Founder Voting Trust Agreement, and Founder Voting Agreement concentrate voting power with the Founders, and the holding of low-voting Class A stock may make the company ineligible for certain indices and depress valuation.
Historically, the first quarter generally has relatively lower sales and sales increase in subsequent quarters with substantial increases in Q3 and Q4, driven by the U.S. government September 30 fiscal year end and commercial December 31 fiscal year end; seasonality may cause fluctuations.
The company and certain officers and directors were recently sued in purported class action and derivative lawsuits, which could result in substantial costs and diversion of management attention and resources.
The risk factors state that issues raised by the use of artificial intelligence in the company's platforms 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
Adjusted EBITDA
US Commercial Customer Count
Customer count growth
Total remaining deal value
Commercial remaining deal value
Summary, forecast, risks and KPIs are extracted from Palantir Technologies Inc.'s SEC filings for Q4 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.