- Palantir reported Q2 revenue of $1.94 billion, up 93% year-over-year, beating analyst estimates.
- The company raised its 2026 revenue guidance to a range of $8.15–$8.16 billion, far above previous forecasts.
- US commercial revenue surged 149% to $764 million, driven by strong adoption of its AI platform.
- Analysts upgraded the stock and shares jumped over 15% in after-hours trading following the announcement.
The company reported revenue of $1.94 billion for the quarter, a staggering 93% jump compared to the same period last year. Adjusted earnings per share came in at $0.41, well above the consensus estimate of around $0.34 to $0.35. It was the first time Palantir’s net income crossed the $1 billion mark, hitting $1.06 billion under GAAP. The numbers were so strong that even the most optimistic analysts were caught off guard.
Record-Breaking Revenue and Profit
The headline figures tell only part of the story. Palantir’s operating income hit $912 million on a GAAP basis, translating to a 47% margin, while adjusted operating income reached $1.19 billion, pushing the margin to an impressive 62%. Free cash flow also set a new record, topping $1.22 billion for the quarter, which represents 63% of revenue. CEO Alex Karp described the quarter as “out of this world” in a letter to shareholders, noting that the company’s Rule of 40 metric—a blend of revenue growth and profitability—soared to 155%.
Commercial and Government Segments Surge
What really stood out this quarter was the performance of Palantir’s US commercial business. Revenue from that segment skyrocketed 149% year over year to $764 million, easily beating the $716 million analysts had penciled in. The company’s AI platform, AIP, is clearly gaining traction among large enterprises, helping them integrate AI into their operations without handing over sensitive data to model providers. On the government side, US revenue grew 90% to $809 million, fueled by defense and intelligence agencies expanding their use of Palantir’s software. Combined, US revenue reached $1.57 billion, accounting for 81% of total sales.
The deal pipeline also looked robust. Palantir signed contracts worth $3.37 billion in total value during the quarter, with US commercial deals hitting a record $2.13 billion—up 153% year over year. The remaining deal value at quarter-end stood at $13.1 billion, an 83% increase from a year ago. CFO David Glazer called it a “phenomenal” quarter, highlighting that the company closed 220 contracts each worth over $1 million.
Guidance Raised Significantly
Perhaps the most important takeaway for the market was the massive guidance upgrade. Palantir now expects full-year 2026 revenue to land between $8.15 billion and $8.16 billion, up from its previous range of $7.65 billion to $7.66 billion. That’s roughly $500 million more at the midpoint, and it’s well above the average analyst estimate of around $7.7 billion. The company also lifted its adjusted operating income forecast to a range of $4.89 billion to $4.91 billion, and its adjusted free cash flow guidance to between $4.5 billion and $4.7 billion.
For the third quarter, Palantir guided revenue of $2.16 billion to $2.164 billion, significantly higher than the $2 billion consensus. Karp told CNBC that the strong growth momentum “looks like it will continue for at least another 18 months,” reinforcing confidence that the rapid expansion is sustainable. The company’s strategy of positioning itself as a middleman between AI models and enterprise data—offering what it calls “AI sovereignty”—seems to be paying off as clients seek to keep control over their proprietary information.
Analyst Reactions and Market Response
Wall Street quickly adjusted its stance after the release. D.A. Davidson upgraded the stock to Buy, while Citi’s Tyler Radke raised his price target from $200 to $245, maintaining a Buy rating. Deutsche Bank’s Brad Zelnick also upgraded to Buy, lifting his target from $80 to $200. Jefferies’ Brent Thill was more cautious, raising his target from $70 to $80. The stock itself surged about 16% in pre-market trading and later closed up nearly 29% on the day, breaking above $163. The rally was one of the strongest intraday moves since Palantir went public.
Despite the enthusiasm, some analysts remain cautious about valuation. Cantor Fitzgerald kept a Neutral rating with a $156 price target, arguing that much of the future growth is already priced in. Still, the overall sentiment is that Palantir is proving it can convert AI hype into hard cash, and the guidance raise suggests the best may be yet to come. The company’s ability to land large commercial contracts and expand its government footprint has made it a standout in the enterprise software space, even as competitors like Snowflake and Databricks grow at a slower pace.
All things considered, Palantir’s second-quarter performance and the subsequent guidance hike paint a picture of a company that’s firing on all cylinders. The combination of record revenue, surging commercial adoption, and a bullish outlook has given investors plenty of reasons to stay optimistic. With the AI wave still building and Palantir positioned as a key enabler, the next few quarters could be just as eventful.