Palantir reported second-quarter results that beat on revenue, beat on earnings, and raised full-year guidance by nearly half a billion dollars. The stock jumped roughly 20% to around $152. That is the headline. The number that actually explains it is buried one line down.
The quarter
| Metric | Result | Expected |
|---|---|---|
| Revenue | $1.94B | $1.80B |
| Revenue growth, YoY | +93% | — |
| Adjusted EPS | $0.41 | $0.35 |
| US commercial revenue | $764M (+149% YoY) | — |
| US government revenue | $809M (+90% YoY) | — |
| FY2026 revenue guidance | $8.150–8.158B | raised ~$500M |
| FY2026 adj. operating income | $4.889–4.897B | — |
| FY2026 adj. free cash flow | $4.5–4.7B | — |
Revenue beat by about $123 million. Both sides of the business — commercial and government — grew faster than expected, which is rarer than it sounds. Usually one carries the quarter.
The number that did it
US commercial at +149%, compounding to roughly +380% since 2024.
Here is why that line matters more than the headline growth rate. Government revenue is real revenue, but the market has always discounted it: contracts are lumpy, procurement is slow, and the customer concentration is extreme. Commercial adoption is the thing that turns Palantir from a defense contractor with good software into a software company with a defense business.
At 149% growth off a $764 million base, that is no longer a pilot-program story. Companies do not triple spend on a platform they are evaluating. They triple spend on a platform that has become load-bearing.
The adjusted free cash flow guide — $4.5 to $4.7 billion on roughly $8.15 billion of revenue — is the other tell. That is a cash conversion profile most software businesses do not have at any scale, let alone while growing 93%.
The part I'd be careful about
A 20% move on an already-expensive stock does not make it cheaper. It makes the next quarter's bar higher. Growth of 93% is being extrapolated by the market into a multiple, and the arithmetic of that extrapolation is unforgiving — a deceleration to merely excellent growth would compress the multiple faster than the revenue beat expanded it.
I'd also watch the composition. US commercial growing 149% while total growth is 93% means the international and government mix is diluting. That is fine while commercial is small enough to compound. It becomes a problem when commercial is the base and there is nothing behind it growing faster.
And government at +90% has a specific driver behind it that is worth naming honestly: defense and intelligence budgets in an unusually active geopolitical year. That is real money and it is also cyclical money. Contracts signed in a tense year get renewed in a calmer one at different terms.
My take
This is the strongest print Palantir has delivered as a public company, and the commercial line is the reason. I take the quarter at face value — the beat is broad, the guide raise is large, and the cash flow is real.
What I won't do is underwrite the multiple. My discipline on names like this is to separate the two questions: is the business working, and is the price sane? The first has a clear answer now. The second depends entirely on whether you believe 149% commercial growth has two more years in it or two more quarters.
I'd rather size small into strength and add on the first deceleration scare than chase a 20% gap up. The businesses that compound like this always give you an entry — usually on a quarter where they grow 70% instead of 93% and the tape treats it like a failure.
Bottom line: commercial adoption is the real story, not the headline growth. The business is proven; the price is a separate bet.
This is analysis, not investment advice.