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Palantir: Palantir's Q4 2025 Earnings: A Testament to its Unique AI Approach

Palantir Technologies Inc.'s fourth quarter 2025 results showcased historic growth, with overall revenue surging 70% year over year to $1.407 billion. The company's adjusted operating income was $798 million, representing a 57% margin, and adjusted free cash flow was $791 million. The earnings per share (EPS) came in at $0.25, beating estimates of $0.2302. The US business now commands 77% of total revenue, up 93% year over year and 22% sequentially, with revenue surpassing $1 billion for the first time.

PLTR

USD 147.76

0.8%

A-Score: 4.8/10

Publication date: February 2, 2026

Full Report

Author: Analystock.ai

📋 Highlights
  • Revenue Surge Q4 revenue hit $1.407B, up 70% YoY, driven by 77% US revenue share ($1B+ for first time).
  • Rule of 40 Score reached 127% (Q4), up 46 points YoY; full-year 2026 guidance at 118%.
  • US Commercial Growth 137% YoY (and 28% sequential) surge, exceeding $3.144B in 2026 guidance.
  • Adjusted Free Cash Flow $2.3B generated (Q4), 51% margin, 82% YoY growth.
  • TCV & Customer Value Closed $4.3B TCV in Q4; top 20 customers averaged $94M trailing revenue (45% YoY growth).

Revenue Growth and Segmentation

The US commercial business grew 137% year over year and 28% sequentially, while the US government business grew 66% year over year and 17% sequentially. For the full year 2025, revenue grew 56% year over year to $4.475 billion. The company guides for full year 2026 revenue of $7.19 billion at the midpoint, representing 61% growth year over year. The company's RPO growth received a tailwind, primarily driven by its commercial business.

Profitability and Cash Flow

Adjusted income from operations was $798 million in Q4, representing a 57% margin, and $2.254 billion for the full year, representing a 50% margin. The company's adjusted gross margin was 86% for the quarter and 84% for the full year. Palantir generated $777 million in cash from operations and $791 million in adjusted free cash flow in Q4.

Guidance and Future Prospects

For 2026, the company expects revenue of $7.182 billion to $7.198 billion, with US commercial revenue exceeding $3.144 billion, representing a growth rate of at least 115%. The company is guiding to a Rule of 40 score of 118% for the full year 2026. CEO Alexander Karp emphasized that the company's performance is a testament to its unique approach to AI, ontology, and data integration.

Valuation and Outlook

With a P/S Ratio of 86.63 and an EV/EBITDA of 349.05, the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 38.9%. Given the company's strong financial performance and growth prospects, the current valuation appears to be aggressive, but justified by the company's unique position in the market and the value it provides to clients.

Palantir's A-Score