Palantir Technologies Inc. (NYSE:PLTR) today announced financial
results for the third quarter ended September 30, 2021.
Q3 2021 Highlights
- Total revenue grew 36% year-over-year to $392 million
- Added 34 net new customers in Q3
- Commercial customer count grew 46% quarter-over-quarter
- US commercial revenue grew 103% year-over-year
- Cash flow from operations of $101 million, representing a 26%
margin
- Adjusted free cash flow of $119 million, representing a 30%
margin
- Closed 54 deals of $1 million or more, of which:
- 33 deals are $5 million or more
- 18 deals are $10 million or more
- Total remaining deal value grew 50% year-over-year to $3.6
billion
- GAAP net loss per share, diluted of $(0.05)
- Adjusted earnings per share, diluted of $0.04
Q1-Q3 2021 Highlights
- Total revenue grew 44% year-over-year to $1.1 billion
- Commercial customer count increased 135% since December 31,
2020
- Cash flow from operations of $240 million, representing a 22%
margin
- Adjusted free cash flow of $320 million, representing a 29%
margin
Q3 2021 Financial Summary
(Amounts in thousands, except percentages
and per share amounts)
Third Quarter 2021
Amount
Revenue
$
392,146
Year-over-year growth
36
%
Amount
Margin
Loss from Operations
$
(91,941
)
(23
)%
Adjusted Income from Operations
$
116,109
30
%
Cash Flow from Operations
$
100,793
26
%
Adjusted Free Cash Flow
$
119,133
30
%
Net Loss
$
(102,137
)
Adjusted Net Income
$
82,079
Adjusted EBITDA
$
119,167
30
%
GAAP Net Loss Per Share, Diluted
$
(0.05
)
Adjusted Earnings Per Share, Diluted
$
0.04
Outlook
For Q4 2021, we expect:
- $418 million in revenue.
- Adjusted operating margin of 22%.
For full year 2021:
- We expect revenue growth of 40% to $1.527 billion.
- We are raising our outlook for adjusted free cash flow to in
excess of $400 million, up from in excess of $300 million.
Per long-term guidance policy, as provided by our Chief
Executive Officer, Alex Karp, we continue to expect:
- Annual revenue growth of 30% or greater for 2021 through
2025.
Earnings Webcast
A public webcast will be held at 6:00 a.m. MT / 8:00 a.m. ET
today to discuss the results for our third quarter ended September
30, 2021 and financial outlook. The live public call can be
accessed by registering online at
https://event.on24.com/wcc/r/3476221/F870D4859769E9BAC474D27B75BB8898.
A replay of the webcast will be available at
https://investors.palantir.com following the event.
A slide presentation including supplemental financial
information and reconciliations of certain non-GAAP measures to
their nearest comparable GAAP measures will be available through
Palantir’s Investor Relations website at
https://investors.palantir.com.
Forward-Looking Statements
This press release and statements on our earnings webcast
contain “forward-looking statements” within the meaning of the
“safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995, including but not limited to, statements
regarding our financial outlook, product development, expected
benefits of and applications for our software platforms, business
strategy and plans (including strategy and plans relating to our
sales force, partnerships, and customers), market trends and market
size, opportunities (including growth opportunities), our
expectations regarding our recent and potential investments in, and
commercial contracts with, various entities, including special
purpose acquisition companies and other privately-held or
publicly-traded companies, and positioning. These forward-looking
statements are made as of the date they were first issued and were
based on current expectations, estimates, forecasts, and
projections as well as the beliefs and assumptions of management.
Words such as “guidance,” “expect,” “anticipate,” “should,”
“believe,” “hope,” “target,” “project,” “plan,” “goals,”
“estimate,” “potential,” “predict,” “may,” “will,” “might,”
“could,” “intend,” “shall,” and variations of these terms or the
negative of these terms and similar expressions are intended to
identify these forward-looking statements. Forward-looking
statements are subject to a number of risks and uncertainties, many
of which involve factors or circumstances that are beyond our
control. Our actual results could differ materially from those
stated or implied in forward-looking statements due to a number of
factors, including but not limited to risks detailed in our filings
with the Securities and Exchange Commission (the “SEC”), including
in our annual report on Form 10-K for the fiscal year ended
December 31, 2020 and other filings and reports that we may file
from time to time with the SEC, including our quarterly report on
Form 10-Q for the quarter ended September 30, 2021. In particular,
the following factors, among others, could cause our results to
differ materially from those expressed or implied by such
forward-looking statements: our ability to successfully execute our
business and growth strategy; the sufficiency of our cash and cash
equivalents to meet our liquidity needs; the demand for our
platforms in general; our ability to increase our number of new
customers and revenue generated from customers; our ability to
realize some or all of the total contract value of customer
contracts as revenue, including any contractual options available
to customers or contractual periods that are subject to termination
for convenience provisions; our long and unpredictable sales cycle;
our ability to successfully grow our direct sales force and to
successfully execute our channel sales and other strategic
initiatives with third parties; our ability to retain and expand
our customer base; the fluctuation of our results of operations and
our key business measures on a quarterly basis in future periods;
the seasonality of our business; the implementation process for our
platforms, which may be complex and lengthy; our ability to
successfully develop and deploy new technologies to address the
needs of our customers; our ability to make our platforms easier to
install and consume; our ability to maintain and enhance our brand
and reputation; news or social media coverage about us, including
but not limited to coverage that presents, or relies on,
inaccurate, misleading, incomplete, or otherwise damaging
information; and any breach or access to customer or third-party
data.
The forward-looking statements included in this press release
represent our views as of the date of this press release. We
anticipate that subsequent events and developments will cause our
views to change. We undertake no intention or obligation to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. These forward-looking
statements should not be relied upon as representing our views as
of any date subsequent to the date of this press release. Past
performance is not necessarily indicative of future results.
Additional Definitions
For the purpose of this press release, the value of deals closed
reflects the total contract value of contracts that have been
entered into with, or awarded by, our government and commercial
customers. Total remaining deal value is the total remaining value
of contracts that have been entered into with, or awarded by, our
government and commercial customers.
The value of deals closed and total remaining deal value include
existing contractual obligations and presume the exercise of all
contract options available to our customers and no termination of
contracts; however, the majority of our contracts are subject to
termination provisions, including for convenience, and there can be
no guarantee that contracts are not terminated or that contract
options will be exercised.
Non-GAAP Financial Measures
This press release and the accompanying tables contain the
non-GAAP financial measures adjusted income from operations which
excludes stock-based compensation, related employer payroll taxes,
and non-recurring expenses primarily related the direct listing of
our Class A common stock (“Direct Listing”) on the New York Stock
Exchange during the quarter ended September 30, 2020; adjusted
operating margin; adjusted free cash flow; adjusted free cash flow
margin; adjusted earnings before interest, taxes, depreciation and
amortization (“adjusted EBITDA”); adjusted EBITDA margin; adjusted
net income; and adjusted earnings per share (“EPS”), diluted.
We believe these non-GAAP financial measures help us evaluate
our business, identify trends affecting Palantir’s business,
formulate business plans and financial projections, and make
strategic decisions. We exclude stock-based compensation, which is
a non-cash expense, from these non-GAAP financial measures because
we believe that excluding this item provides meaningful
supplemental information regarding operational performance and
provides useful information to investors and others in
understanding and evaluating our operating results in the same
manner as our management team. We exclude expenses primarily
related to the Direct Listing during the third quarter 2020, as
they are one-time non-recurring charges. Additionally, we exclude
employer payroll taxes related to stock-based compensation, as it
is difficult to predict and outside of Palantir’s control. Our
definitions may differ from the definitions used by other companies
and therefore comparability may be limited. In addition, other
companies may not publish these or similar metrics. Further, these
metrics have certain limitations, as they do not include the impact
of certain expenses that are reflected in our consolidated
statements of operations. For example, adjusted free cash flow does
not reflect our future contractual commitments or the total
increase or decrease in our cash balances for a given period. Thus,
our non-GAAP financial measures should be considered in addition
to, not as a substitute for, or in isolation from, measures
prepared in accordance with GAAP.
We compensate for these limitations by providing a
reconciliation of each of these non-GAAP measures to the most
comparable GAAP measure. We encourage investors and others to
review our business, results of operations, and financial
information in their entirety, not to rely on any single financial
measure, and to view these non-GAAP measures in conjunction with
the most directly comparable GAAP financial measure.
A reconciliation table of the most comparable GAAP financial
measure to each non-GAAP financial measure used in this press
release is included at the end of this release. A reconciliation of
non-GAAP guidance measures to corresponding GAAP measures is not
available on a forward-looking basis without unreasonable effort
due to the uncertainty regarding, and the potential variability of,
reconciling items that may be incurred in the future such as
stock-based compensation, and related employer payroll taxes, the
effect of which may be significant.
Available Information
Palantir uses its Investor Relations website at
https://investors.palantir.com as a means of disclosing material
non-public information and for complying with its disclosure
obligations under Regulation FD. Accordingly, investors should
monitor Palantir’s Investor Relations website, in addition to
following our press releases, SEC filings, public conference calls,
and webcasts.
About Palantir Technologies Inc.
Palantir Technologies Inc. builds and deploys operating systems
for the modern enterprise. Additional information is available at
https://www.palantir.com.
Who dares, wins.
Palantir Technologies Inc.
Condensed Consolidated Statements
of Operations
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Revenue
$
392,146
$
289,366
$
1,109,022
$
770,582
Cost of revenue (1)
86,804
149,340
251,841
282,044
Gross profit
305,342
140,026
857,181
488,538
Operating expenses:
Sales and marketing (1)
153,443
334,911
451,919
536,082
Research and development (1)
94,316
313,915
303,311
466,530
General and administrative (1)
149,524
338,977
454,054
503,033
Total operating expenses
397,283
987,803
1,209,284
1,505,645
Loss from operations
(91,941
)
(847,777
)
(352,103
)
(1,017,107
)
Interest income
379
494
1,127
4,312
Interest expense
(609
)
(2,085
)
(3,039
)
(12,325
)
Change in fair value of warrants
—
(9,201
)
—
811
Other income (expense), net
(8,528
)
(3,293
)
(11,297
)
1,218
Loss before provision (benefit) for income
taxes
(100,699
)
(861,862
)
(365,312
)
(1,023,091
)
Provision (benefit) for income taxes
1,438
(8,543
)
(1,121
)
(5,043
)
Net loss
$
(102,137
)
$
(853,319
)
$
(364,191
)
$
(1,018,048
)
Net loss per share attributable to common
stockholders, basic
$
(0.05
)
$
(0.94
)
$
(0.19
)
$
(1.43
)
Net loss per share attributable to common
stockholders, diluted
$
(0.05
)
$
(0.94
)
$
(0.19
)
$
(1.43
)
Weighted-average shares of common stock
outstanding used in computing net loss per share attributable to
common stockholders, basic
1,964,395
905,462
1,893,911
713,879
Weighted-average shares of common stock
outstanding used in computing net loss per share attributable to
common stockholders, diluted
1,964,395
905,462
1,893,911
716,027
__________
(1)
Includes stock-based compensation expense
as follows (in thousands):
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Cost of revenue
$
14,860
$
94,385
$
54,866
$
120,285
Sales and marketing
57,124
263,958
186,418
322,353
Research and development
34,472
256,769
122,976
309,698
General and administrative
78,379
231,847
247,048
276,578
Total stock-based compensation expense
(i)
$
184,835
$
846,959
$
611,308
$
1,028,914
(i)
On September 30, 2020, in connection with
the Direct Listing, we incurred $769.5 million and $8.4 million of
stock-based compensation using the accelerated attribution method
related to the satisfaction of the performance-based vesting
condition for restricted stock units and growth units,
respectively, that had satisfied the service-based vesting
condition as of such date.
Palantir Technologies Inc.
Condensed Consolidated Balance
Sheets
(in thousands)
(unaudited)
September 30,
December 31,
2021
2020
Assets
Current assets:
Cash and cash equivalents
$
2,335,068
$
2,011,323
Restricted cash
41,316
37,285
Accounts receivable
174,405
156,932
Marketable securities
148,077
—
Prepaid expenses and other current
assets
112,624
51,889
Total current assets
2,811,490
2,257,429
Property and equipment, net
28,778
29,541
Restricted cash, noncurrent
46,791
79,538
Operating lease right-of-use assets
220,846
217,075
Other assets
116,422
106,921
Total assets
$
3,224,327
$
2,690,504
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
17,654
$
16,358
Accrued liabilities
179,467
158,546
Deferred revenue
208,100
189,520
Customer deposits
232,707
210,320
Operating lease liabilities
43,581
29,079
Total current liabilities
681,509
603,823
Deferred revenue, noncurrent
26,723
50,525
Customer deposits, noncurrent
42,734
81,513
Debt, noncurrent, net
—
197,977
Operating lease liabilities,
noncurrent
219,646
229,800
Other noncurrent liabilities
5,659
4,316
Total liabilities
976,271
1,167,954
Stockholders’ equity:
Common stock
1,991
1,792
Additional paid-in capital
7,577,305
6,488,857
Accumulated other comprehensive loss
(1,695
)
(2,745
)
Accumulated deficit
(5,329,545
)
(4,965,354
)
Total stockholders’ equity
2,248,056
1,522,550
Total liabilities and stockholders’
equity
$
3,224,327
$
2,690,504
Palantir Technologies Inc.
Condensed Consolidated Statements
of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended September
30,
2021
2020
Operating activities
Net loss
$
(364,191
)
$
(1,018,048
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
11,057
10,308
Stock-based compensation
611,308
1,028,914
Non-cash operating lease expense
23,417
28,815
Unrealized loss from marketable
securities
7,238
—
Other operating activities
3,076
3,621
Changes in operating assets and
liabilities:
Accounts receivable
(15,412
)
(112,723
)
Prepaid expenses and other current
assets
(7,872
)
(11,598
)
Other assets
(8,155
)
(20,944
)
Accounts payable
1,158
(29,372
)
Accrued liabilities
20,360
42,138
Deferred revenue, current and
noncurrent
(3,781
)
(30,937
)
Customer deposits, current and
noncurrent
(16,227
)
(140,162
)
Operating lease liabilities, current and
noncurrent
(22,786
)
(34,725
)
Other noncurrent liabilities
1,234
6,393
Net cash provided by (used in) operating
activities
240,424
(278,320
)
Investing activities
Purchases of property and equipment
(6,783
)
(7,475
)
Purchases of marketable securities
(155,315
)
—
Purchases of alternative investments
(50,941
)
—
Other investing activities
(3,000
)
(2,500
)
Net cash used in investing activities
(216,039
)
(9,975
)
Financing activities
Proceeds from the issuance of common
stock, net of issuance costs
—
942,529
Proceeds from issuance of debt, net of
issuance costs
—
199,369
Principal payments on borrowings
(200,000
)
(400,000
)
Proceeds from the exercise of common stock
options
474,683
79,473
Repurchase of common stock
—
(3,777
)
Other financing activities
(401
)
(250
)
Net cash provided by financing
activities
274,282
817,344
Effect of foreign exchange on cash, cash
equivalents, and restricted cash
(3,638
)
(678
)
Net increase in cash, cash equivalents,
and restricted cash
295,029
528,371
Cash, cash equivalents, and restricted
cash - beginning of period
2,128,146
1,401,962
Cash, cash equivalents, and restricted
cash - end of period
$
2,423,175
$
1,930,333
Palantir Technologies Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(unaudited)
Non-GAAP Reconciliations
Adjusted Income from Operations and
Adjusted Operating Margin (in thousands, except
percentages)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Loss from operations
$
(91,941
)
$
(847,777
)
$
(352,103
)
$
(1,017,107
)
Add: stock-based compensation
184,835
846,959
611,308
1,028,914
Add: employer payroll taxes related to
stock-based compensation
23,215
20,172
90,214
20,172
Add: non-recurring Direct Listing
charges
—
53,737
—
53,737
Adjusted income from operations
$
116,109
$
73,091
$
349,419
$
85,716
Adjusted operating margin
30
%
25
%
32
%
11
%
Adjusted Free Cash Flow (in thousands,
except percentages)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Net cash provided by (used in) operating
activities
$
100,793
$
(51,990
)
$
240,424
$
(278,320
)
Less: purchases of property and
equipment
(5,377
)
(1,780
)
(6,782
)
(7,725
)
Add: cash paid for employer payroll taxes
related to stock-based compensation
23,717
1,192
86,289
1,192
Adjusted free cash flow
$
119,133
$
(52,578
)
$
319,931
$
(284,853
)
Adjusted free cash flow margin
30
%
(18
)%
29
%
(37
)%
Adjusted EBITDA (in thousands, except
percentages)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Net Loss
$
(102,137
)
$
(853,319
)
$
(364,191
)
$
(1,018,048
)
Less: interest income
(379
)
(494
)
(1,127
)
(4,312
)
Add: interest expense
609
2,085
3,039
12,325
Less: change in fair value of warrants
—
9,201
—
(811
)
Add: other (income) expense, net
8,528
3,293
11,297
(1,218
)
Add: provision (benefit) for income
taxes
1,438
(8,543
)
(1,121
)
(5,043
)
Add: depreciation and amortization
3,058
2,515
11,057
10,308
Add: stock-based compensation
184,835
846,959
611,308
1,028,914
Add: employer payroll taxes related to
stock-based compensation
23,215
20,172
90,214
20,172
Add: non-recurring Direct Listing
charges
—
53,737
—
53,737
Adjusted EBITDA
$
119,167
$
75,606
$
360,476
$
96,024
Adjusted EBITDA margin
30
%
26
%
33
%
12
%
Palantir Technologies Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(unaudited)
Adjusted Earnings per Share, Diluted
(in thousands, except per share amounts)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Net loss attributable to common
stockholders
$
(102,137
)
$
(853,319
)
$
(364,191
)
$
(1,018,048
)
Less: change in fair value attributable to
participating securities
—
—
—
(5,483
)
Net loss attributable to common
stockholders, diluted
(102,137
)
(853,319
)
(364,191
)
(1,023,531
)
Add: stock-based compensation
184,835
846,959
611,308
1,028,914
Add: employer payroll taxes related to
stock-based compensation
23,215
20,172
90,214
20,172
Add: non-recurring Direct Listing
charges
—
53,737
—
53,737
Less: income tax effect related to
adjustments (1)
(23,834
)
(13,040
)
(74,647
)
(17,621
)
Adjusted net income attributable to common
stockholders, diluted
$
82,079
$
54,509
$
262,684
$
61,671
Weighted-average shares used in computing
GAAP net loss per share, diluted
1,964,395
905,462
1,893,911
716,027
Adjusted weighted-average shares used in
computing adjusted earnings per share, diluted (2)
2,341,270
1,224,898
2,329,889
1,047,079
Adjusted earnings per share, diluted
$
0.04
$
0.04
$
0.11
$
0.06
__________
(1)
Income tax effect is based on long-term
estimated annual effective tax rates of 22.2% and 22.1% for the
periods ended 2021 and 2020, respectively.
(2)
Includes an additional 376.9 million and
436.0 million dilutive securities for the three and nine months
ended September 30, 2021, respectively, and an additional 319.4
million and 331.1 million dilutive securities for the three and
nine months ended September 30, 2020, respectively, that are
excluded from a GAAP perspective due to the Company’s net loss
position.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211109005487/en/
Investor Relations Rodney Nelson
investors@palantir.com
Media Lisa Gordon media@palantir.com
Palantir Technologies (NYSE:PLTR)
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