Skip to content 
There is a company out there that counts the US Army, the Pentagon, and the CIA among its clients. It builds software that helps soldiers make targeting decisions in real time. And this Monday, it posted the kind of earnings that made every other software company look slow.
Meet Palantir Technologies. And boy, did it just have a quarter.
The numbers first
Revenue grew 85% year-over-year to $1.63 billion, beating analyst estimates of $1.54 billion. That is the fastest revenue growth Palantir has posted since it went public in 2020. Net income quadrupled to $870.5 million. Adjusted earnings per share came in at $0.33, well ahead of the $0.28 that Wall Street was pencilling in.
| Metric | Q1 2026 Result | Analyst Estimate |
| Revenue | $1.63B | $1.54B |
| Adj. EPS | $0.33 | $0.28 |
| Net Income | $870.5M | |
| US Govt Revenue | $687M (+84% YoY) | |
| US Commercial Revenue | $595M (+133% YoY) | |
| Q2 Revenue Guidance | $1.797B to $1.801B | $1.68B |
| FY 2026 Revenue Guidance | $7.65B to $7.66B | $7.27B |
So what exactly does Palantir do? Think of it as the plumbing beneath the surface of complex operations. Governments feed it raw intelligence, satellite feeds, supply chain data, and battlefield signals. Palantir’s software helps analysts make sense of all of it. Fast.
The government engine is accelerating, not slowing
Its flagship military product, the Maven AI system, analyses battlefield data and supports targeting and command decisions in real time. The Pentagon has been expanding its use of Maven steadily. This quarter it moved closer to making it an official programme of record, meaning long-term, locked-in use across the US military. Not a pilot. Not a trial. A permanent fixture.
US government revenue grew 84% to $687 million. That actually accelerated from the 66% growth in the previous quarter. Revenue growth usually slows as the base gets larger. Here it is speeding up. Last month, Palantir also secured a $300 million contract with the US Department of Agriculture. The US Army has a contract worth up to $10 billion over ten years. President Trump gave the company a personal shoutout on social media in April, praising its “great war fighting capabilities.”
Karp put it plainly in his shareholder letter: “The United States remains the center, the constant core, of our business. And that business is erupting.”
The commercial surprise
Here is the part that caught even seasoned Palantir watchers off guard. The commercial side of the business grew faster than the government side.
US commercial revenue jumped 133% to $595 million. Palantir signed deals with Airbus, Bain, GE Aerospace, Stellantis, and Nvidia, among others. In just three months, the company closed 206 deals worth at least $1 million each, 72 deals worth at least $5 million, and 47 deals worth at least $10 million. Its commercial customer count rose 31% to over 1,000 clients.
Karp had a pointed observation on the earnings call: “How can a company grow 100% in the US with functionally a non-existent salesforce?” The answer, if you believe Palantir, is that the product becomes so embedded in operations that clients come to them.
Why Palantir thinks it is different from every other AI company
There is an obvious question lurking here. With OpenAI, Anthropic, Google, and Meta all racing to build powerful AI models, why would anyone pay a premium for Palantir’s software layer on top?
Karp addressed this directly. He wrote in the shareholder letter that model companies are engaged in “an intensely competitive race in which we have seen token costs suffer a thousandfold decline over just a few years and where winners and losers swap places every six months.”
Palantir’s argument is that it is not in that race. It uses models from multiple providers but sits above them, embedding AI into actual operational workflows where the switching costs are enormous. Oppenheimer analysts, who initiated coverage last week with an Outperform rating and a $200 price target, called this the “ontology-based architecture” moat. Once Palantir is wired into how an organisation thinks and acts, ripping it out is nearly impossible.
Revenue per employee hit $1.5 million on an annual basis. Karp described the financial results as demonstrating “a level of strength that dwarfs the performance of essentially every software company in history at this scale.” Bold words. The numbers, for now, back them up.
What comes next
Palantir raised its full-year 2026 revenue guidance to $7.65 to $7.66 billion, a 71% jump from last year and well above the $7.27 billion consensus. It guided for $1.797 to $1.801 billion in Q2 revenue, also comfortably above estimates. Adjusted free cash flow guidance for the full year was raised to $4.2 to $4.4 billion.
Karp told CNBC he expects the US business, across both government and commercial, to double again in 2027.
The stock has fallen around 18% this year despite these results, caught in a broader software selloff driven by fears that AI disrupts older business models. The irony is that Palantir may be one of the few software companies that actually benefits from AI getting better, because better models make its platforms more powerful without changing who controls the workflow layer.
That is the bet Palantir is making. And right now, it is winning it.
Banner Featured Image Source – Google Gemini
