Analysis
Palantir reported second-quarter revenue of $1.94 billion, up 93% from a year earlier and ahead of the $1.80 billion analysts expected, per CNBC. Adjusted earnings came in at 41 cents a share against 35 cents expected. The company raised full-year revenue guidance to a range of $8.15 billion to $8.16 billion from $7.65 billion to $7.66 billion, and lifted its US commercial outlook to above $3.42 billion.
The line that moved the stock was US commercial: $764 million in the quarter, up 149% year over year, with remaining deal value in that segment more than doubling to $6.24 billion. For most of Palantir's public life the bear argument was that it was a government contractor with a software multiple. A commercial book growing at that rate, with backlog growing faster than revenue, is the specific number that argument has to answer.
A company this size accelerating to 93% growth is close to unprecedented in enterprise software. For context, the fastest-growing public SaaS names of the 2021 cycle topped out in the 60-70% range at a fraction of Palantir's revenue base, and most decelerated hard past $1 billion in annual revenue. Palantir is compounding faster at $8 billion of guided revenue than it did at $2 billion -- the shape of a platform selling into a budget cycle that is expanding, not a product taking share in a fixed one.
“A company this size accelerating to 93% growth is close to unprecedented in enterprise software.”
The 29% single-session move also functioned as a short squeeze, wiping out roughly $3 billion in short-seller positioning. That matters for how you read the price. A meaningful part of the move is mechanical -- forced covering -- rather than a considered repricing of forward cash flows, and squeezes retrace. The valuation was already the most stretched in large-cap software before this print, and it did not get cheaper.
The counterweight most of the coverage skipped: guidance raises of this size embed assumptions about deal timing that can slip a quarter, and Palantir's US commercial motion still depends heavily on short-duration pilot conversions rather than multiyear committed contracts. Concentration is real -- government work remains a large share of the base, and federal budgets are set annually by a Congress that has funded on continuing resolutions repeatedly. None of that is visible in a quarter that beats; all of it is visible in a quarter that misses.
For founders and GPs, the read-through is about the comp set rather than the ticker. Every AI application company raising right now is being marked against a public benchmark that just proved enterprise AI budgets convert into recognized revenue at scale. That helps late-stage marks in the near term and hurts them if Palantir decelerates, because the entire category is being underwritten off one public proof point.
What to watch next: whether US commercial holds above 100% growth in Q3, whether net dollar retention keeps rising or flattens, and how much of the $6.24 billion in remaining deal value converts inside twelve months. Those three lines decide whether the multiple is defensible or whether August was the top.
