Palantir shares fall after fourth-quarter loss, but revenue beat expectations

Palantir reported a loss for the fourth quarter of 2020, while revenue beat analysts’ expectations in its earnings report on Tuesday.

Shares of Palantir were down more than 6% in premarket trading.

Here are the key numbers:

• Revenue: $322 million vs. $300.7 million expected, according to a Refinitiv survey of analysts
• Loss per share: 8 cents, which is not comparable to estimates

The company said it’s increased its average revenue per customer over 2020. Average revenue per customer for the year came to $7.9 million, up 41% from 2019. Its top 20 customers generated $33.2 million each on average in 2020, up 34% year over year.

In the fourth quarter, Palantir said it closed 21 deals worth at least $5 million in total contract value. Twelve of those are worth at least $10 million, the company said.

The tight-lipped government contractor first debuted through a direct listing on the New York Stock Exchange in September with an opening trade of $10 per share. That gave it a $16.5 billion market cap. Palantir has since more than tripled in value, with shares closing Friday at $31.91, giving it a $52.6 billion market cap.

Palantir has made a point to set itself apart from other tech companies born in Silicon Valley. In a letter to investors in its prospectus to go public, CEO Alex Karp said that while Palantir started in Silicon Valley, “we seem to share fewer and fewer of the technology sector’s values and commitments.” Karp said the company has “repeatedly turned down opportunities to sell, collect, or mine data,” unlike those “built on advertising dollars.” The company has said it would move its headquarters from Palo Alto, Calif. to Denver.

Palantir has been more willing to work with government agencies during Donald Trump’s presidency than other California-based tech companies that received significant pushback from their employees on such contracts. Employees at Amazon, Google and Microsoft have urged the company to step away from deals with agencies and military divisions including U.S. Immigration and Customs Enforcement (ICE), Customs and Border Protection (CBP) and the U.S. Army.

Palantir, by contrast, has built its business largely on lucrative government deals for its data analytics software, including with ICE. But the company has also said it would generally not do business “with customers or governments whose positions or actions we consider inconsistent with our mission to support Western liberal democracy and its strategic allies.”

The company also serves commercial customers, which make up less than half of the business. Palantir reported in its first earnings release that 56% of its revenue in Q3 came from its government segment, which has grown at a faster clip than its commercial business.

Palantir did not provide an updated customer count in its first earnings release in November after disclosing in its prospectus that it had 125 customers in the first half of the year. But it said its customer concentration had declined, with 61% of revenue through Q3 coming from its top 20 customers instead of 68% over that same period in 2019.

This story is developing. Check back for updates.

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