PLTR - Earnings call transcript Q1 2021 | Palantir Technologies Inc.

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Operator

Welcome to Palantir’s Earnings Call.

We will be discussing the results announced in our press release issued prior to today’s call and posted on our Investor Relations website.

During the call, we will make statements regarding our business that may be considered forward-looking within applicable securities laws, including statements regarding our outlook for the current quarter and other future periods, management’s expectations about our future financial and operational performance and other statements regarding our plans, prospects and expectations. These statements are not promises or guarantees and are subject to risks and uncertainties, which could cause them to differ materially from actual results. Information concerning those risks is available in our earnings press release distributed prior to today’s call and in our SEC filings. to statements, obligation by as no law. undertakes update except forward-looking required Palantir course we today’s certain during of Further, the call, measures. adjusted will financial to refer These GAAP measures. addition considered substitute should or non-GAAP as for, from, not a in isolation in financial measures to, be

is these presentation measures, on provided release, today’s Palantir’s in information prior comparable Rodney. about of investor to release website at I’ll Relations that, over press SEC Investor available measures, to Palantir’s non-GAAP Additional our filings presentation reconciliation press including non-GAAP With GAAP included investor are it and and call. investors.palantir.com. turn to

Rodney Nelson

Jacko. Thanks,

the Joining Chief we various to Shyam rates Financial turn me Sankar, unless will Head rates when are Kevin growth over Glazer, I'll discussing us stated. and comparisons of the Dave started. Global Shyam Kawasaki, year-over-year Officer, Over call call, on Officer to Development call otherwise get of reflect refer Chief business. today’s These our Business Operating course to the

Shyam Sankar

and innovation. the past results Proving This be be of last The product now. and development This to April, for was XX%. margin, Thank commercial XX% strong is Grounds on government relentless flow is matter XXX%, a results quarter. growth you, million, million We Rodney. ago Cutting-edge in area of year an operating had US continues our billings XXX%. focus was possible RPO deal grew was XX% up that wouldn't We $XXX adjusted had demonstrated the growing XX%. across $XXX I'm in grew future free excited commercial And continued fire XX%, of efficiencies about and this Apollo business These adjusted for results. increase most Adjusted without Edge our QX live over distribution margin this duration on month. Revenue cash was exceptionally and at value. just Utah drove an and AI. Dugway at our product the

micro approach We are call that we pioneering models.

in chain shooters, different and chained parts action the of are interest and incredible that we believe this for upgraded maximum that AI for than even the to operational in seeing is basis micro dynamically the more services sum nation. at efficiently is multiple into together to Edge while floor sensors if its AI place, multiple Edge. AI Apollo space at on or Edge, deploy maintenance across the from work understand, whole. of like most decide of in independently predictive operationalize are next wildfire on advantage transform augment same the Just enduring government models enabling detecting And our multiple act are to is in ease. scale to important to running mud and delivered. micro on with subsequently are software US be we models here than from problems greater flexibility decision the into the each train, platforms still advantage. no models using leverage can and at flight, the a some decompose and from links There more true airplane human hardest the how is across the making next-generation architectures, factory our AI chained alpha, customers in to you and commercial the of Edge, facing isolation, modern risk to task to component and board will models, evolution improved have Edge this versioned space Customers customers workers manage AI where the innovation This at occurring

one and and a have customers a of handful less US have where efficacious, we to particular, Fortune defense response results of the lot in revenue a than we continue of spending. generate results. XX% for US XXX the of Turning we commercial, the in pandemic and seeing been to markets. government in In exceptional has growth in are commercial government grew only We tenth to headroom a percent Where XX% the these annual tailwind.

our to UK We looking continuing to continue We interest. and we than have across XX and pace. widen industry customer just the business widened players our new we Since beginning not commercial added and X.X the capability are see across commercial to Anderson announced up have and times. and in UK US We the product. doubled commercial Syntropy. also pilots our are more US and qualified develop it's opportunities February, the And and with of distribute and established indicators Active where strength MD forward government customers the at opportunities partnership winning. are

and opportunities design We've of We've a of transportation we to build billion XX will around use companies than years seeing their production, from engineering, more we that infrastructure business see salvo of their revolutionary build of industrials of from Palantir’s This in operating for of broader markets and in zero, Apollo by But chains the cases. all for as in-service assistant, and beginning, Edge deliver picture foundry Iron company this the years can the distribution in digital major where even these broader to procurement, Stark's building the always capabilities Man entered push entire next well life. silo risk Sarcos logistics customers all see of talked into a leverage day physical customers. digital AI Lilium, eliminating into suit. $X to understood about testing, the can are their an they're AI an Sarcos. pipeline R&D. We they is ramps organization also eVTOL QX can with more connected foundry integrated mountains how guys, a Sarcos operations. on exoskeletons. a a the the common around In use expanding you data forefront quality, software, ground leverage and off Iron from up, manufacturing cost the Man Tony set and Jarvis, efficiently for systems. digital Gotham, standing shoulders and the at off And to sea suit. very partnership the of prospects partnered first and and our their foundry Well, These shave in roadmaps but with are will incorporating foundry to real of is change architecting company

to dramatically scale West, time shorter can market the companies these time We with and momentum innovation parallel, our unabated. the market. are executing radically to the goals ramps business ambitious And companies In investing in our ability fit government down and our is on help horizons. software in natural, production and accelerate move in on get continues to backing

growth year-over-year, First quarter we increased by government XX% generated revenue in in government. the US the XX% large year-over-year part fueled

scope In Edge the America's $XX Apollo first worth play system the continue to investments The We X-year for awarded critical edge defense. in provide a were work Nuclear role safeguard stockpile. we central the Administration platform distribution. on AI like to quarter, our the and cutting is in governments helping to the product, for become respond Security a National of operating to million to the broadened and operating contract to nuclear government our with mission further of pandemic back up

we future are crucial on and nuclear are this. course, to nation's our our partner the importance security nation's proud broader to Of assets and of western

XX balance have by advanced over Information we combatant as and government activity globally initiatives. continue agencies commands a the expect intelligence, forward increase DoD we data, across pursue integrated in both with to of This of we see QX deal all tailwinds operations, strong year. in business. Global the civilian dovetails government the strategic advantage decision and software course Experiment, was all opportunities over enabling As the year, Dominance AI. our our leveraged In business from across And supply generate to we the defense work in of to defense look we logistics our variety pipeline the

we pipeline team our force the businesses applying far year, our the force, and puts this massive hires In in plans As continue to we've our XX of direct nearly alone, remains made team way well we've pilots. strides goal and on triple our of sales achieving earlier and adding distribution us momentum. this year. more quarter building growth I first mentioned increase to so include growing sales and into customers outlined a made our digit the this headcount the robust. much behind This to February, sales

is products sales and unlock, meeting with really with the combined the outreach turning generating our ago. What's or they high to deeper first Our fourth the coming opportunities. quality force today and more value are more, point The from events feels of meeting year now understanding like fifth much faster. where a the to a flywheel are us customers

element critical direct to distribution our force sales to channels addition of strategy. expansion a is our In

software The more our future. significantly cloud ISP of We and complimentary continue our We quarter. first opportunities spectrum is in integrators to tremendous. with to there companies commercial IBM partners XX government announced providers, and the system and are across the We this here last days pursue partnership customers to channel across bringing our segments. in within We booked invest market. pace both believe partners our product from

develop to join areas. our functional SIs with are XX developing deliver integrators, markets Today with on our go system and to work targeted our reach customers and We geographies, partnering have industries continued different products. to

as providers to channels. view cloud continue We

it's or for clinical Or very, go integrating execute to foundry research take cloud for a a to and the the into market We activities. an integrate for time. very At drive healthcare, market of have for scale NXC problem blueprints in consumption amount one been day, the huge cloud programs, and you seen providers core by most the the outcomes example, customers their NHS a can a architecture, reference days. record at with And the to but COVID amount either These successful theoretically rapid deployed. where you marked and architecture are are the tested battle that use end architectures architecture importantly, of go actually NIHs for to that worlds drive shift, quickly. can used success solves never providers on of of data vaccination

side, are results are. or software to mind, and product would enabled A reforging this that cutting their government that to and are while our in ready But to partners our development monetization to as Dave always, [ph] phase. drove the defense the existential categorical turn same know, extend to and successful restarting still say I'll we they take resolve ones going delivered help. And stand to the regions all for production The and is help these to that joint platforms, industries on note, commercial always large face seeing We programs, the a into has of our life met customers and overcoming AI that, to where hearts traditional stand through these every help, software’s Really, that us it manufacturer. of AI into internal class face through more realizing country world they're that operations and company financials. with are across performance in over both of reiterate many are the that that our their There for mission. the government and reality. Thank and at edge pandemic and wins I movement. pace crises offering. blinding and new our and its ready any both adversity, dedication channel more continuing off customer their to respond to manufacturing is create our you way architecture unquestionable any themselves draft to Palantir’s. because contractors hobbits Edge any platforms On the pandemic, we want we architecture, for the leverage buying the our also of vicissitudes you Apollo are of final

Dave Glazer

QX product now increased performance, of bringing and an Adjusted $XXX revenue first strong quarter a And to results. followed adjusted margin by efficiencies $XXX strong billings exceptionally free XX%, flow edge first $XXX our operating $XXX QX Shyam. improvement million, by review a XX%. million, This outlook. We Thanks, generated distribution to our income from drove QX to I'll increased million, representing backed year-over-year. was XXXX. of Cutting margin XX% a of growth increased up quarter revenue million XXX% of million. and and cash representing $XXX

is of Looking our indicative combination growth ahead quarter underlying business. free cash our first guidance unique margin was XX%. performance, adjusted prior our XX%, The growth and at total revenue of of economics revenue XX% the of our unit XX% revenue of flow

US representing US Our XX% US total US growth $XXX the ended government XX%, quarter run nearly XX% business revenue million and commercial first growth. rate, with first increased annualized revenue quarter as

year-over-year. first at increased US year-over-year million, the $XXX quarter government increased XX% quarter Looking revenue by government segment, XX% revenue revenue and in international revenue XX%. first was government up

We we government we of government fuel as expect elevated this in and segment. pipeline QX our significant beyond that in momentum deals have to continue, a growth will building durable believe

First totaled a strength particular million, US seeing quarter are XX% XX% US, commercial segment $XXX as we commercial revenue and revenue increased in up year-over-year, year-over-year. the

XXX% the and commercial will still to In as addition as also at than that they when to procurement strong Average entered we're million we're growth $X economic Shyam X.X end value we've assist in $XXX quarter, mentioned, But to duration in XXXX performance in and leads in increases $XX obligation business we pilots and closed in or our new including regions more the first deals contract their more. shorter $X.X up in the number the Europe, government X.X the and In was particularly year-over-year. billion, total more of revenue business million years doubled countries XX% accelerate quarter, of COVID as contract are these that seeing considering we're with pandemic. seeing total health challenges growth, into year-over-year. was crisis. in of of up at first in six recovery, or first contracts value, recover. facing and substantial February. to XX significant customers Abroad results the from remaining regions quarter ended deals Remaining since end more these to we These muted years, the particularly stemming XXXX. of opportunities, worth million accelerate We up usual our responded commercial from active continuing than are invest expect the

Moving both believe and to deals for through XXXX, will create we expand, tailwinds and we which deal value. expect renew duration these

increased year-over-year quarter $X.X XX to trailing First customer per month million. XX% revenue

represented trailing XX quarter to year-over-year $XX.X First month trailing and revenue increased XX% XX% top with ago year compared million revenue the month per XX XX in customer’s of XX% period.

and and we market, across our per through revenue to reflecting beyond multiple increased such customer you new move XXXX and into growth middle segments SMBs, especially customer distribution expect As market taper, average as broadening base. channels,

our discuss stock on margins expenses an excludes Next, basis, I'll and compensation. adjusted based which

year XX%, ago First quarter Contribution up versus adjusted versus period. XX% XXX the ago was up margin basis margin gross XXXX year basis points points was a period.

stock based generated and XX%. our million, First margin quarter adjusted representing flow, payroll In XX% the was income an $XXX related million from cash adjusted employer operations, we of quarter, of excluding ahead cash margin compensation operating in adjusted taxes significantly free of free $XXX of prior XX%. first representing guidance

$X.X on our of sheet in expenses to over the strong paid $XXX undrawn. increase flow capacity continue in to of cash related free as million with us our team, targets. we year million, board. With expect growth invest our cash new course QX, which of to we our balance As by remains revolver in the all over down heads This come the billion we the these debt a on flexibility in substantial sales early provides for initiatives $XXX and expanded pursue of in investment under April, availability long-term outstanding support total and

for For we QX guidance, XX% expect we of revenue adjusted $XXX of expect margin or revenue operating quarter. year-over-year and the million, XX% growth

provide Karp flow cash to strength guidance to excess the Alex year and we Continuing XXXX, full next strategy continue first the call our forth with free for with $XXX and our for guidance, each long end four that, Additionally, guidance at in our turn million to I'll than on And of providing over are of execute by from for are adjusted call. in earnings our year, XX% term guidance it revenue to the set this years year greater we will quarter. raising regard the XXXX earnings breakeven revenue CEO, of Q&A. Rodney

Rodney Nelson

Great. Thanks, Dave.

start And first with begin through we'll Shyam, So se. this one. questions I'll Avi, submitted million shareholders from our Q&A with asks. you on X.X

Unidentified Analyst

to profit to company into using keep intend in expand? or the turn the current XXXX Does resources to

Shyam Sankar

There numbers First voted we Avi two having congrats on focus question. that of most on are the all, on.

generate is had generate first business' - cash excluding primarily. adjusted swing generating stock-based really of XX% flow, operating adjusted of flow, the income, cash which And cash million The profitability, is money to $XXX cash. flow is a is a On of which flow, comp margin. ability the other measure free deposit, million to cash we adjusted positive $XXX a

had to product distributing of on income, long-term targets our and the that point XX% is and products Not shows established of that And strength. leverage. the shows business we margin. this of one is So This around mention, operating shy tons efficiently tons listing. underlying demonstrating financial software its the time we a a we're company

it that So really shows hit that. can we

and two if And of at you we're together, proving things cash the potential business. so these look generation profitability the

people cash sum The in software, growth margin. right. growth free adjusted XX. of talk XX%. important beginning. have in I flow incredibly adjusted for that's for in We realize your greater revenue revenue That's XX, the Well, actually, Sometimes flow But be should and puts site than sum about XX% the of rare at that software margin companies. we're companies us, area. of of rule your only QX, cash XX% a to Fortune the three just QX. us We're That XXX is of handful in thing most the free think top

starting medium-size down just to enterprises. to market are We move

US less spending. of is of basis defense government revenue a tenth Our points, a less than percent XX

what we're huge just to to to vision the thing And go doing. have aggressively And that's is do go much exciting There's product to most invest after. prudent We so invest market after. in. a to

this on generating as in excess year. are earlier growth. in in focused Alex XXXX, $X of billion We're revenue on We focused focused We're outlined profitability. on

Rodney Nelson

next on I'll gotten around announced. a We've with stick this one. the you investments Thanks, Shyam. that we've announcement, the few questions Great.

Unidentified Analyst

Lilium So to potential you Palantir Can and investments? speak if Jackson the motivation view in risk, K. you do size and investment why return? Sarcos is to invest investors such as anticipate and corresponding Robotics? choosing future asks, How decisions can companies these behind

Shyam Sankar

Jackson for Thanks the question.

buying no As And companies we compelling on businesses unique teams their and the not distribution. bet with for years of siloed to compelling manufacturing systems all buying risk from have even some to day ERP wants monster. throughout the of enterprise, There like that value a using and to homegrown and wasted I best the our a CRM in understand increasing accelerate entrenched software invest shaving mentioned zero. mountains focused on execution toy to is call, their operating of opportunity our bureaucracy see build and to make the folks They road that from to we map. mention our would management system money relentlessly we on they is their viscerally off IT to These really with mini both them customers. ambitious distribution own to here, are partner solution. traditionally are otherwise think winning. opportunity focused our this on compelling are systems to business, accelerate Overall, That's to

Rodney Nelson

one rest And group. of more to Great. going maybe the before Shyam, you, for the

Unidentified Analyst

quarters? what asks, compete your with plans Microsoft to are in the T. Jeffrey coming

Shyam Sankar

Foundry I Ballmer's build and across IT build integrators, challenge same The product And its the in remember We at with that build bespoke system But build build holistic with to solution. and proof reference famous or software their that's time. own building. actually compete AWS, approach droopingly Jeffrey. you heterodox GCP compete build, on We system systems Gotham our it's and to for Microsoft when anything health through something with Microsoft is delivered the against better, other capabilities developers, developers, Well, orthodoxes and AWS. in ameliorate. developers, high we radically periods our vendors. a short pudding our by and both with versus other customers. Thanks This But supply customers' hit our comes buy. also And shamanism in faster, deliver IT we the future, it's meme, their about that yes, architecture. is priest because chain, compete Microsoft, of in the jaw of to the software you're mean, the build vendors revolutionary their or in and desire these marketing, aren't means against stunning look results. tore definition, integrators. don't with buying or pandemic something as or failed

and Edge And continues battle-tested is to allow tested, few AI battle that you isn't in you Apollo between undifferentiated from a the year I of few LEGO our architecture sophisticated distance their we customers, deliver AI And integration I battle-tested mean, clicks providers, the to to a for frankly starting literally, DIY earlier, the market. Our these cloud a to go-to-market selling we competing most custom and steps allows mentioned put pace us replace alternative that with particular, of bots and the operational next at architectures as that to best hours against see few enough. incorporate a motion innovating into archetypes over are that because just is Skynet. their their precisely shy to offerings

Rodney Nelson

Great. in with Kevin, similar to next kind vein. this the of come Shyam. I'll It's Thanks, one. you

Unidentified Analyst

you that Office kind do If businesses? expect reach do to asks, of as crucial Microsoft and becoming you adoption? so see as Donatas when impactful Palantir for

Kevin Kawasaki

expect People should from more question. the operating for Thanks the purpose. modern

a particularly business. and in most type customers, the most for we're of the of need, our time crucial impactful software any For great

an Our for office, doctor’s job, their just our People a the the office. day-to-day at users zone. product floor, their in on mission. line, airport, aren't war the factory on front in They're use day-to-day

or last I and at of think for about thousands aging parking of thousands Japan, find needing an home nursing caring year needs to for who's airline care. a preventative population aircraft. in to an routing deliver flights Workers worker

customers thousands in inspection in to nearly two physicians the on the of vaccination foundry. users world, governments from United running are administrators, with nearly United fire States are foundry. and delivered programs XX the sites, using of doing distribution UK allocated, California, sets, ground and our million data fighting the both the XXX successful every is One the Kingdom experts ordered, In of The wildfires X,XXX most risk In vaccine federal the foundry. to chain is vaccines. supply and jabs. vaccines place And manufacturers, X,XXX vaccine XX million manufacturing in pharmacies, foundry government tracked for the United jurisdictions, the from is States, over to and understand vaccination XX states,

our Our customers is is modern products win, which help of what required the system. operating

Rodney Nelson

Thanks, on back I'll one. to Kevin. you Shyam, this come next

Unidentified Analyst

Johan with ability the asks, that recent shows before that with work there and your further? partnership Faurecia, to with clients. one Is manufacturing Airbus develop sector your any even plan to

Shyam Sankar

Thank deep, you, and strength of huge Johan. us a focus is Absolutely, an for it's manufacturing historically. deep area

factory Chrysler. Fuzhou. announce will foundry I'll to at on open look a new auto time. mining, in in Just with with real Manufacturing chemical manage Every aerospace, factory ecosystems energy, across America suppliers in quality automotive, customer, you North companies, the floor, manufacturing find

around telemetry for again cutting-edge and And all have day out call products execution, much into chain turning for management, the operations quality not in manufacturers, CRM, And chain X, rapid going value foundry logistics, into foundry production, manufacturing. their value here and that managing whole after We manufacturing Sarcos manufacturing sales, companies suppliers archetypes the data for their only IoT and value, for sales beyond customers. but using for more. I real their deliver and from ERP, around extends our the and that OEMs, and procurement, like forecast, working supply quality, build are capital, Lilium demand to

Rodney Nelson

We've few come a Great. lines. this next gotten on these you to I'll Dave, on question.

Unidentified Analyst

see you on Palantir balance other sheet? Bitcoin asks, L its having cryptocurrency ever or could type Brian any of

Dave Glazer

The balance $XXX free billion in it, cash Brian, at adjusted the answer $X.X thanks a in quarter discussed flow and at look short cash is for in yes. our including We're we've it about end, thinking question. QX. sheet, internally. million even Take

it's from look table on perspective other our a business treasury beyond. as the and So across well we definitely as as investments

That's terms side business Bitcoin do We're it. we accepting convenient. of for open from customers, our other more there. that, the On in accept of

Rodney Nelson

Dave. Shyam, coming about Thanks, our healthcare. work question your back in Great. to

Unidentified Analyst

to early identification, data, properties, and presence small foundry compound molecular does stage moves as have not pharma discovery in trial molecules drug clinical asks, Conrad especially from but biologics?

Shyam Sankar

for life at. our very we absolutely preclinical Thanks, work science Translational drug papers Institute, were I'd and Center listed of through the Conrad. Yeah, Sciences was and end made actually discovery are NCI, public highlight growing lots Palantirians on Advancing and Cancer with our at which are working NIH, it. A quickly, Palantir doing National we where work. the small National the sliver, is are of published work

You can check some past of from out these ASCOs.

on Our work Anderson spans therapies And Sciences translating discovery. invested that medicine. know drug also discovery cutting-edge into MD biology partnerships you new that's I'm preclinical obviously, and anything work drug development. biotechs and lot breakthrough on head we're if discovery. with but computational to proud only just in Roivant, but more across they've clinical, portfolio focused will With going approaches with to where condensate drug doing, announce to cell-based accelerate Celularity, not Roivant directly about on we're a to help their we work science around their their

Rodney Nelson

the on Great. go to this one, come about market. Thanks, next I'll you Kevin, Shyam. a question to

Unidentified Analyst

in and businesses? Palantir downstream demo kick-off an seen if has asks, day Jackson Palantir how these medium-sized how interest the expand increase smaller not, Click, of Double planning can Palantir better the businesses? And demonstrate companies? is to K Since value to from to

Kevin Kawasaki

I States contributing in yes, see for growth recently. distribution. to to United QX revenue of what's of is and number and of answer distribution. this I our of A QX guide our XX% driver up widening great results, businesses commercial we're expect a the that's And our more the big mean, is medium-sized we small signed short because increasing efficiencies

and too. And global all mentioned across from learn over, their demonstrating tuning can On an publicly regional Click, to Double for to this edge activity. up. in cycle vast in foundry provide large smaller our interest local business, turning sales day We our demo generates organization, tuning are how Our beating companies is generates the has their - in And product pipeline multinationals that than to a exciting could our most million the meetings. so one across some have customer commercial And up in times two day individual that day pilots and foundry US to the of and job. in UK. bring by doubled. I their business the are increased Of is X.X shareholders more half calling things shareholders, they showing active think qualified are

Rodney Nelson

stick similar Kevin, you I'll next question in as the Great. with vein. is

Unidentified Analyst

the announcement getting going for to to or with Fortune reaching Palantir - us? waiting to this out software asks, for are T. Is companies to offer they recent to is Palantir information is for are companies? that how Palantir free, individual we XXX come out companies waiting companies Christopher to

Kevin Kawasaki

is those we suppose this. for is this available responses to access this I data information impact, huge out make it. this many year, through of this relied ago, make to successful is year get of we but The most Palantir beginning at when the who pandemic an foundry unlock can stages about question. the a Thanks effective were a of the Over foundry. last on we knew the there. Palantir need learn COVID-XX, opportunity needed I help to to remember to people that can purpose

dialing of that they critical called to long person I a until my to government, began one to after calling PPE within hospital room, person together Sitting and than out do state calling with in several she that a and the How answers city, data hospital, a do proud into state many And last? that just with have university state, know How question. government. trying bring to How calls, and the help. who's that we're I war more them board. and to And for this finally, let could How nothing local remember finding out? unlock. we we run entire here centers we essentially what we're spreadsheet a technology How So research we trying health power will had long hours ventilators? say offering is many beds workers? get foundry have? the a figure to was white

Rodney Nelson

Great.

out on Shyam, next a little to So question, bit. zooming

Unidentified Analyst

Palantir's it leader company will the Jose data long-term try asks, to of identity, be what tech and both is the industry? many in or AI be a parts

Shyam Sankar

be most company the software Thanks, we to world. the Jose. aspire important Well, in

otherwise in threats governments they're unique Personal of terrorism respond We And tried to a that to and deter We the how prevent reaction of siloed from various LEGO or of a well totalitarian do-it-yourself prevent And we health. liberty to shaman. of from applications computer software just their have way. this bots And enhanced in in OS, is protection standardization countries the worked that are terrorism time systems dream. Alex sold broadly, hobby We defense would operating sometimes organizations being We We own operating life. for of and out. some destroying the said way has an bunch either well system our shifts manage are enterprise, private would way shocks Similarly, been in that our have our drowning and data, to do operating our stuck say public Personal business. modern enterprise help to operating the approach. the these of ship regime. generational we the site as respond systems. before with collection help are make civil are we're on know was too. destroying computing Foundry completely enterprises stuck right help and from death-row. that right helped life. They we capabilities the Gotham software. without modern the

needs of it the and you're around its again what mystical, when have feels record obvious. the ability track meets this precedent to have see world to AI. the We the building Apollo perceived moment. before need this going with for the and And need the corner And even is Edge seeing

Rodney Nelson

next this with you to come I'll Dave, Great. one.

Unidentified Analyst

increasing expand stock-based you will and dilute quarter the significantly compensation can longer company on Palantir's each shares asks, much by EPS? impact Louis have total how the further float of will

Dave Glazer

Thanks, Louis.

diluted very low at when count. have share a fully dilution We looking

than fully working this share couple overhang. count as we're same years really -- outstanding continue really, year, the has of share at so diluted growth, to the of a percent couple time, when low. two-tenths increased it less far to over will our respect next normalize So profitability. With that with SBC, the toward topline make going progress And we're this you through to

Shyam Sankar

with add comp off shows the We and Equity the frankly, zoom do everything are first with here. employee But we working here, is out basis a alignment. we have investor a said place. fundamental their like, the second I orientation want, managing want the to asses which Dave dilution. stock-based should that. employees value point you company. would is XX just just the The of for Obviously, in us discipline right why to long-term grow

granting our plan yes, to to opportunities to in shareholder we them so equity to share continue And company value. the your employees and maximize providing upside a meaningful in order

Rodney Nelson

Great. Dave, stick I'll you. with

Unidentified Analyst

Karp Pop its selling does why shares? keep asks, B. Jason

Dave Glazer

Karp reference. the and nice Jason, call Alex thanks question, We'll here. Pop him for

end December has option Alex but expiring of stockholders, he off, one our first large that be extended. grants are the at of can't So that is largest two

to largest we've shares And And it's these and he'll motivated so as holding as exercises very, to after create seen to just a be large options, will even stockholders. to hold. stock sales continue one many corresponding result, when that build shares. tax well this, for very he as continue exercise in a goes And exercises he of our going

nitty-gritty, if the want more you can detail. in filings interested you're you If check our

Rodney Nelson

one come to this next you with open Great. the I'll before Shyam, we call. up

Unidentified Analyst

the Emil asks, often job for consider employees of companies. you on tutorials of software, your to given courses for request postings. use now on course creating incentive to the on software you their software access or appears to Would Could Palantir experience that? how comment we've more

Shyam Sankar

job and Emil. Indeed, contract Thanks, really for has postings they're that day, experience, number roles that of require growing every the accelerated.

full to to to work hiring, lines build building training have foundry, XX to and around do robust to enable businesses are especially your system who economies and returning question, in integrators here, even more we and we want built But billion-dollar these we've system foundry. integrators employment. help restarting that training large with Now of around practices

free to make our of and operate we're shareholders So anyone we to militaries, training individual in planning to that unemployed all allied in. of foundry veterans U.S. markets the is available and who to

meaningful restarting are And it really that this. make hope excited to a contribution reopening. and will we about We

weeks. for this coming around tuned in more the details stay So

Rodney Nelson

call Q&A. open for Great. the up Operator, we'll

Operator

comes Your question from instructions] first [Operator Chris Merwin from Sachs. Goldman

is open. Your line

Chris Merwin

resonating XX%. the working on for below here. you've and Thanks a there's know with your last are in of the wanted new direct like customers right. All foundry second that on commercial was the force? be add. still about or then lot I come congrats added from quarter. there, this part IBM the of and my the improved But And sales that most question side the business. growth those been customer It including quarter customers. Did It question of would through ask hear Thanks. taking around just I how commercial looks wanted quarter, looks from you the to XX the like to modularization on

Kevin Kawasaki

Chris. Yeah, Thanks, more Great. the gaining momentum. and is commercial business more

the mentioned, we US. in it grew As XX%

last So folks what We've are the we're there. seeing where opening, economies incredible hired sales traction there's in just XX is quarter.

here. channel IBM deal us are translating see You're is number in two starting of days UK, increased of its our activity strategy XX It's a qualified of made pilots customers. US of first that what to the launched and number double the there. more helping times are and investments pilots, what's partnership terms ability activity. in substantially source archetypes, around opportunities that translate and also The through fueling The the to product generated we've into the within half commercial being the also those more do modularization

of Overall, quite momentum excited. we're in. there, place a investing we'll lots So that continue

Pharencia, continue through in we've Europe as open also the momentum starts manage to And Fuzhou, in sort Lilium We win in to expecting deals the Europe, Europe. that the same Engi, US, so in there. we're of of Europe. seen pandemic, a bunch tailwind and

Chris Merwin

so Thanks much.

Operator

will question Parvi from next your from Provokzian Jefferies. And come

line Your open. is

Brent Thill

thanks. Hey, Brent It's Jefferies. Thill at

conversations, lot of considerable there's tail strength what I On business, seeing, long of opened door a think said there's the but you're past the sustainable of that. amount has COVID you government in a And questions post-COVID. the about the that many to

to could look what you talk you. as you're you seeing Thank just out? If

Shyam Sankar

Thanks, solution but a absolutely to of COVID, had It's the per not of lot things COVID was delivered, work response a showed faster buy are was That's be to to that that of and got there and never customers Brent. things where were it just a bespoke, those started related approach right. fact of se. really the it whether custom-build something days, them result as going work. had many in their There allow going many mark-to-market to to to get

US year. combat We're the experiment that the We've we've half to outside XX that of not of accelerate lot work with seen here. and so but US. and continuing with And Administration National at across We certainly back next there. is contact dominance Nuclear across the Security command, year accelerated the business, over We've seen build course, civilian this. expecting pipeline was that COVID global directly related in the defense-related not to build work it's all, is healthcare, the of the that seen we DoD, the agencies, activity into the by even also visible of the participate build a during information inside

is the time around and think that And are Apollo for most they So of is the are things probably these the quite the opportunities AI, of the at that exciting exist didn't is Edge about things the listing, like which on even capabilities product excited the innovating pace are of which one what at most at, compounding. we creating these looking about if building. we're pace you

Operator

from Your Stanley. from Morgan Weiss next instructions] Keith [Operator comes question

Your line is open.

Keith Weiss

for kind about Excellent. quarter, growth and new on question the be a Thank of the side customer the margin remainder especially I nice very how you the guys those And thinking with question equation. should of taking commercial throughout we adds. of had year. expense the

maybe to So David. you,

of You flow close to did over $XXX free in cash million QX.

basis? if years go-forward expectations year? as a how on couple over the how plus sustain that you philosophy that about you XX% we figure our that the think should guide the to OpEx How next sort investment of for growth? look What's Palantir behind of that And will we to guiding You're that on full brand should use cost for year. the throughout

Dave Glazer

absolutely. Absolutely,

a results. margin. out expense as and margin you pleased noteworthy had free Top cash super to noted, XX% XX% a It very the quarter, shows adjusted operating flow adjusted call There's contributor on we strong XX% nothing So unit economics. there. obviously underlying side. line being the Overall, growth, with revenue the

in coupled out sales the growth, of the XX% business, really XX% the very operating around time, margin, with be while revenue we're investing same ahead investments guide QX, into hires, to team, sales to investing Let's going look at going continued in be culture. And offices we're reopening. really to We company get talked a on the to in focus R&D, focused it's the of lot people back investment the together and to what product Shyam and on get strong about. think important

Operator

your Alex from Wolfe. next will Zukin from question And come

Your open. line is

Alex Zukin

rep the to Hey, that the you clearly, the guys. you growth ask to And given those pilots hiring that is pilots versus sector the the up. time high growth? et Thank confidence putting you will How visible line, about stated divergence commercial revenues? revenue conversion revenue Can wanted convert is in I question. in for commercial cetera? when are the guys talk in the

Kevin Kawasaki

We're hires into Yes. ramps being aggregate revenue is seeing We're seeing [ph] quite are getting excited kind tires. are a those where faster. that converting accomplished, our by which the also for the the the ramp just of we're flywheel at teeth activity, faster, getting acceleration

allow that these would week or three the product, This months bullish, seeing the pilots to something the accomplish four crank long is product revenue very and modularization, efficiently archetypes, in there. themselves is lot structure that us way feeling are a we now are because in of made here. pilots compressing like a to a agree giving investments have The that would I the us more less. turn terms capacity we're products generally of how cost they're taking So in these taken and to distribute

year. seeing high with want We it. we're keep we're of accelerate for in force the more so And very back conversion, And the sales half even doing happy further the Look returns to the to really to we're here. building. that

then the x a think I of created X, been doubling a I since have February qualified the those into think and about think third and pipeline two pilot the just already something. half we're when about that's seeing about I turned of

good dimensions. And believe to pipeline the every bigger we're that continue to that we're product funnel all to how about on, we flowing going road is see and feeling bigger combine have with here, these map build we're executing additional reason we the as so that acceleration that And across if you investments, through.

Operator

back to I turn the This call brings session. Q&A end us of our closing over for remarks. the audio

Rodney Nelson

quarter. excited early. you We're up for about We'll all you all you talk for the Thank joining us. to Thank soon. waking

Operator

This Thank conference today’s will you, conclude call. everyone.

now may disconnect. You

Palantir (PLTR) 11 May 212021 Q1 Earnings call transcript