(Bloomberg) — Shares of Palantir Technologies Inc. fell in extended trading Monday as the market remained unimpressed with the company’s annual sales outlook, after the stock already tripled over the past year .
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The company slightly increased its annual revenue guidance to a range of $2.68 billion to $2.69 billion. Analysts on average expected $2.68 billion, according to data compiled by Bloomberg. The company raised its adjusted operating profit outlook to a range of $868 million to $880 million. Analysts expected $846.6 million.
The stock fell 10% in extended trading in New York. Palantir is one of the leading stocks in the tech world’s current AI frenzy, with new products helping to catapult it more than 200% in the past 12 months.
Co-founded by Peter Thiel, Palantir develops software and analytics tools for companies and government agencies allied with U.S. interests. Palantir’s roots lie in government sales – the venture capital arm of the US Central Intelligence Agency was among its earliest backers – but “rampant and growing demand” from US companies for its intelligence software artificial is now boosting the company, Chief Executive Alex Karp told shareholders in a statement. letter.
Palantir sells its AI software through boot camps, an engineer-led strategy to get customers up and running in just days instead of months and what the company attributes to the increase in numbers of U.S. commercial customers by 69% to 262 during the first quarter. Growth in revenue from government contracts is now growing at a slower rate than commercial revenue, and analysts expect commercial sales to eclipse government sales next year.
Palantir reported $335 million in government revenue in the first quarter, up 16 percent, and $299 million in commercial revenue, an increase of 27 percent from a year earlier.
“Palantir’s commercial segment had another strong quarter with 40% growth in the U.S., but gains are expected to decline” in the second half in that business and in the government unit, wrote Mandeep Singh, an analyst at Bloomberg Intelligence, in a research note. Billings growth of 2% in the first quarter “suggests a lack of pipeline visibility, even with strong commercial customer additions.”
The company reported revenue of $634.3 million for the quarter ended March 31, up 21% from a year earlier. Analysts had estimated revenue at $615.8 million, according to data compiled by Bloomberg. Net income was $106 million, the largest quarterly profit on record, far surpassing the average estimate of $83 million. Palantir announced its first profitable year in 2023.
For the current quarter, Palantir said it expects revenue between $649 million and $653 million and adjusted operating profit between $209 million and $213 million.
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