Palantir shares took a hit, dropping around 7% in extended trading after the defense tech firm reported weaker-than-expected guidance. The company’s earnings per share came in at 8 cents adjusted, in line with expectations, but its revenues of $634 million fell short of the $625 million expected by analysts.
Looking ahead, Palantir issued guidance for the upcoming second quarter and full year, with projections that were lower than what was anticipated by LSEG. The firm expects second-quarter revenue to land between $649 million to $653 million, compared to the $653 million expected. Furthermore, the company guided full-year revenue to be between $2.68 billion and $2.69 billion, weaker than the $2.71 billion that was forecasted by LSEG analysts.
CEO Alex Karp expressed optimism about the company’s U.S. commercial business, citing it as a significant driver of growth in the near future. Karp also highlighted the impact of software on modern warfare, emphasizing that the platforms used by defense and intelligence partners pose a real threat to adversaries.
Despite the disappointing guidance, Palantir reported $105.5 million in net income for the quarter, marking a substantial increase from the previous year. The company’s revenue of $634 million was up 21% year-over-year, showcasing impressive growth.
The weaker-than-expected full-year guidance comes as a surprise, given Palantir’s success in marketing its artificial intelligence products to both government and private sector clients. The company recently secured a $178 million contract with the U.S. Army and conducted over 660 bootcamps in the first quarter to showcase its technology to potential customers.
While Palantir’s financial results for the quarter were solid, the market’s reaction to the weaker guidance underscores the challenges the company faces in meeting future revenue expectations. As the firm continues to navigate the ever-evolving landscape of big data and artificial intelligence, it will be interesting to see how Palantir adapts its strategy to sustain growth and profitability in the long term.