Palantir 2025 Q3 Earnings Surpasses Expectations with 219.2% Net Income Growth

Palantir Technologies (PLTR) delivered Q3 2025 results that exceeded expectations, with revenue and EPS growth outpacing forecasts. The company also raised full-year revenue guidance to $4.4 billion, reflecting strong demand for its AI-driven solutions and government contracts.

Revenue

Palantir’s total revenue surged 62.8% year-over-year to $1.18 billion in Q3 2025, significantly outperforming the $725.52 million recorded in the prior-year period. Government revenue, a critical segment for the company, reached $632.68 million, surpassing the estimated $602.53 million. Commercial revenue also showed robust growth, hitting $548.42 million against the projected $493.66 million. The combined performance of these segments underscored the company’s expanding market presence and strong client retention.

Earnings/Net Income

Palantir’s EPS soared 233.3% to $0.20 in Q3 2025, compared to $0.06 in Q3 2024. Net income also saw a dramatic increase, reaching $476.75 million, a 219.2% year-over-year jump from $149.34 million. The EPS and net income surges underscore robust profitability and operational efficiency.

Post-Earnings Price Action Review

The post-earnings price action for Palantir was marked by volatility and mixed signals. Despite beating revenue and EPS estimates, the stock initially fell 4-6% post-announcement, driven by valuation concerns and broader market declines. However, the company’s raised guidance and strong revenue growth fueled optimism, with shares recovering some ground in subsequent trading. The stock’s 30-day returns following revenue beats in 2025 averaged 20-24%, though high volatility—averaging 42.5%—highlighted the risks of a strategy tied to earnings surprises. The Rule of 40 score of 114% in Q3 2025 further validated the company’s growth and profitability, but investors remained cautious due to elevated multiples and insider selling activity. <visualization dataurl="https://cdn.ainvest.com/news/visual/visual_components/viz_30kguxdx.json"></visualization>

CEO Commentary

Alex C. Karp emphasized the “transformational impact” of AI platform adoption, citing U.S. government revenue growth of 77% YoY and U.S. commercial revenue growth of 121% YoY. He also highlighted the company’s “highest sequential quarterly revenue growth guide in history” for Q4, projecting 61% YoY growth.

Guidance

Palantir raised Q4 2025 revenue guidance to $1.327–$1.331 billion and adjusted income from operations to $695–$699 million. Full-year 2025 revenue guidance was set at $4.396–$4.400 billion, with U.S. commercial revenue expected to exceed $1.433 billion (104% growth). Adjusted free cash flow guidance of $1.9–$2.1 billion and GAAP profitability for all 2025 quarters further reinforced confidence in the company’s financial trajectory.

Additional News

1. M&A Activity: Palantir entered the UAE market via a joint venture with Dubai Holding, named Aither, to expand AI adoption in key sectors.

2. Analyst Upgrades: Wedbush raised its price target to $230, maintaining an Outperform rating, citing AI-driven growth potential.

3. Strategic Partnerships: The company announced collaborations with Snowflake, Lumen, and Nvidia to enhance commercial AI adoption.

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