Palantir Technologies Inc. sees huge demand for AI products and raises profit outlook for 2024. Palantir's CEO, Alex Karp, reported in an interview regarding the release of financial results that the demand for artificial intelligence is driving the company's growth, pushing shares up by more than 15% after the stock market closed.
The Denver-based software company announced that it expects an adjusted profit of 834 to 850 million US dollars for this year, which is higher than the estimate of 760.3 million US dollars compiled by Bloomberg.
Palantir achieved a net profit of 210 million US dollars for the first time in 2023, exceeding analysts' expectations of 194.5 million US dollars.
"Our business in the commercial sector is exploding in a way we can't handle," Karp said, referring to the "huge wave" of demand the company is currently experiencing. Fourth-quarter revenue increased by 20% to $608 million, thus exceeding analysts' expectations of $603 million.
Palantir's shares rose 20% to $16.72 before market open on the New York Stock Exchange. Over the last 12 months, the share price has almost doubled.
Karp stated that he is currently focusing 85% on the American business and is completely restructuring the company to meet the increasing demand for artificial intelligence.
"This is particularly impressive considering we have so far failed to build an effective sales team," he said. According to Karp, this year Palantir plans more than 2,000 training or bootcamp sessions for potential clients across the entire USA, which represents a doubling compared to the previous year.
Palantir's Revenue from the US Commercial Market Increased by 70% to $131 Million in the Fourth Quarter. The company was founded in 2003 by CEO Karp and billionaire investor Peter Thiel and offers AI-based software to both commercial customers and governments that are allies of the USA.
The customers use the products to make complex, data-driven decisions. The customers include, among others, the engineering company Jacobs, the luxury vehicle manufacturer Ferrari NV, and the United Nations World Food Programme.
Palantir Announced Growth Driven by Both New Customers and Increasing Demands of Existing Customers. In the Fourth Quarter, 103 Deals Worth Over 1 Million US Dollars and 21 Deals Worth Over 10 Million US Dollars Were Concluded, Representing a Doubling and Quadrupling Respectively Compared to the Same Period Last Year. The Company Still Generates the Majority of Its Revenue from Government Contracts.
Palantir's Philosophy of Supporting US Military Goals and Those of Its Allies Is an Integral Part of the Company. Palantir Has Received Government Contracts for IT Systems That Have Been Dropped by Other Major Technology Companies Due to Employee Protests.
Karp refused to give details on how Palantir is currently being used in conflicts worldwide. However, he spoke of the risks posed by countries such as Iran, Russia, and China to the USA and its allies, emphasizing that Palantir tools are actively being utilized.
"We are now engaged on three fronts," said Karp. "We are proud of the role we play on all three. I can't say more than that." Some of Palantir's government sales have been controversial in the past. At the end of last year, the company won a significant contract from the British National Health Service, which sparked criticism in Europe and highlighted general unrest.
Some foreign governments have resisted relying on a US company as the key figure in technology behind national health, defense, and other operations.
Despite the widespread expectation that France, Germany, and other countries would purchase software for their own purposes after seeing its deployment in Ukraine and most recently in Israel, this increase has not yet occurred. During a conversation with investors on Monday, Karp expressed frustration with customers in Europe, including the private sector.
"Europe has decided not to participate in this revolution [referring to AI]," he said, pointing to relatively slow sales on the continent. The company is therefore shifting more of its resources to the USA.
Karp said he told Palantir employees working in Germany and France to "pack up and return" to the USA, as demand is increasing faster than the staff can handle. Additionally, he said that Palantir is being "bombarded" with inquiries from job seekers, and he is personally involved in hiring decisions, as it was in the early days of the company.
