Palantir earnings best estimates. CEO Karp sees huge opportunity in AI.

We are using all our resources to seize one of the biggest opportunities in the world, Karp said in an interview with Barron. And he said they intend to do that while remaining profitable under generally accepted accounting rules.

Karp added in a quarterly letter to shareholders that large language models, which are at the heart of generative AI tools, will transform enterprise software.

The depth of engagement and demand for our new AI platform is unprecedented, he writes. The first version of AIP will be made available to select customers this month, Palantir (ticker: PLTR) says.

Palantir, which supplies analytics software to commercial and government customers, reported first quarter revenue of $525 million, up 18% from a year ago, topping both the company’s guidance range of $503 million at $507 million, and the Wall Street Consensus Forecast of $506 million. On an adjusted basis, the company earned 5 cents a share, one cent higher than Wall Street’s estimates.

The company reported GAAP net income of $17 million, or one cent a share, in the second consecutive quarter that Palantir has been profitable under GAAP. Adjusted operating income of $125 million was above the company’s expected range of $91 million to $95 million. Adjusted free cash flow was $189 million, a quarterly record for Palantir.

Commercial revenues for the quarter were $236 million, up 15% from a year earlier, and ahead of the Wall Street Consensus Forecast of $217 million found by FactSet. CFO David Glazer said in an interview that US commercial revenues increased 39% sequentially from the December quarter, surpassing the $100 million level for the first time.

Government revenue was $289 million, up 20%, in line with Wall Street estimates, including $230 million in US government revenue, up 22%. Glazer said the results also reflect discipline on the expense side.

The company said its number of customers was up 41% from a year ago and up 7% consecutively.

For the second quarter, Palantir expects revenue in the range of $528 million to $532 million, slightly below the consensus forecast of $537 million, with adjusted operating income in the range of $118 million to $122 million. The company expects to be GAAP profitable again in the June quarter and to remain profitable on that basis in the third and fourth quarters.

Palantir now expects full-year revenue of $2.185 billion to $2.235 billion, a slight increase from the company’s previous forecast of $2.18 billion to $2.23 billion. The company now sees full-year adjusted income from operations of $506 million to $556 million, up from a prior range of $481 million to $531 million.

In his letter, Karp addressed some of the current security and privacy issues related to generative AI and large language models. We intentionally designed our software around the involvement and supervision of human operators before real-world actions can be taken, including, for example, targeted operations in a military context, he writes. The machine must remain subordinate to its creator.

Talk with BarronKarp said the Palantir platform will be independent of which large language model customers want to use and that the company’s software will help both commercial and government customers unlock the value of their data, both by changing the supply chain and taking someone’s life, a reference to the company’s considerable business with defense and intelligence agencies.

Karp, who was performing tai chi moves during a video conference interview from the company’s Denver headquarters, said AI is generationally unique, but that no one knows where it should land and when it becomes dangerous. .

He also claims that very few people have a useful product in this area and that there is a subset of people who want to slow it down. He’s not one of them.

Palantir shares jumped 27% in recent trading after the earnings announcement. They were up about 4% in the regular Monday session. The stock is up 20% so far this year.

Email Eric J. Savitz at eric.savitz@barrons.com