Alex Karp sees his company as a beacon in a very dark world.
"We founded this company to be a ray of light to America and our Western allies," Karp, chief executive of Palantir Technologies (PLTR) , said during the company's earnings call. "And in doing so, we built software for the institutions as they ought to exist, not as they do exist."
Related: Analysts adjust Palantir stock price target ahead of earnings
Palantir's sales are driven largely by helping the U.S. government with its counterterrorism efforts, but the data-analysis-software provider, co-founded by the billionaire investor Peter Thiel, has also pushed more deeply into managing, interpreting and reporting data for large companies.
"The world is on the precipice of what could be a very severe set of violent interactions in the Middle East," Karp told analysts. "And it goes without saying that at Palantir we know where we stand and we are very much supporting America and its allies in the Middle East, including Israel."
Palantir reported second-quarter earnings on Aug. 5 and in a letter to shareholders, Karp said that the enterprise software business "had for years been crowded with companies whose principal innovation was selling a product that was capable of little more than reincorporating and shuffling data around in what amounted to yet another storage system."
Palantir CEO: growth driven by 'unrelenting' AI demand
"The rise and increasing sophistication of artificial intelligence capabilities have exposed the extent of dysfunction within enterprise software deployments," he said. "This was the era of thin technology and an abandonment of any real interest in results."
Those companies, however, Karp said, "are now being swept to the side."
Related: Analyst resets Palantir stock price target ahead of Q2 earnings
"They attempted to seize the cultural and moral high ground at the expense of anything resembling a commitment to outcomes," he said. "And society, not to mention customers, have grown disinterested in their theater."
Karp said AIP, the company’s “flagship artificial intelligence platform, was launched just over a year ago and it has already transformed our business.”
"Our growth across the commercial and government markets has been driven by an unrelenting wave of demand from customers for artificial intelligence systems that go beyond the merely performative and academic," he said.
Palantir by the numbers
Palantir earned 9 cents a share, up 80% from a year earlier and beating Wall Street’s call for 8 cents a share. Revenue rose 27% to $678 million, coming in ahead of the consensus estimate of $653 million in sales.
The company said that it expected annual revenue between $2.74 billion and $2.75 billion, compared with the $2.68 billion to $2.69 billion expected earlier. The forecast is above Wall Street’s estimate of $2.7 billion.
"This is a super important time for Palantir because we have proven to the world that what we do is quantifiable and real," Karp told analysts. "We are focused on growing this company to be much more impactful, much larger, and much more valuable."
Palantir also raised its annual revenue expectation from U.S.-based companies by $11 million, to $672 million.
"Our exceptional results are a reflection of a market that is quickly awakening to a reality that our customers have already known," said Ryan Taylor, chief revenue officer. "We stand alone in our ability to deliver enterprise AI production impact at scale. We are delivering these results in the face of an unprecedented enterprise AI opportunity."
Analyst sees 'prove me' quarter
Wedbush analyst Dan Ives boosted his price target for Palantir to $38 from $35 while maintaining an outperform rating, declaring the results were "a major validation quarter/outlook for Palantir and the broader AI revolution thesis."
"While the company has seen many skeptics from [Wall Street], this was a 'prove me' quarter to prove its expanding partner ecosystem as more use cases for its products lead to rising demand across the landscape for enterprise-scale generative AI solutions while gaining share with the AI revolution now hitting the 2nd/3rd/4th derivatives," Ives told investors in a research note.
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Ives said the “star of the show” was U.S. commercial revenue growing 55% year-over-year, well above the company’s guidance range of 45%+, as enterprise customers continue showing interest in its marquee products. The boot camp strategy results in elevated multiyear deals in the pipeline with 96 deals of at least $1 million and 27 deals of at least $10 million, the analyst said.
DA Davidson analyst Gil Luria raised the firm's price target on Palantir to $28 from $24 and kept a neutral rating on the shares, according to The Fly.
Palantir reported a strong beat-and-raise quarter as revenue growth accelerated due to persistent demand for AI solutions, the analyst said.
Key metrics mostly trended positively with net new U.S. commercial customer additions in the quarter at 33, above historical norms but slightly lower than the 41 last quarter, Luria said.
Citi said Palantir's second-quarter results were “impressive, especially against a choppy software demand backdrop.”
The company reported one of the strongest revenue beats in years, and an even stronger guidance raise to the full year, the firm said.
Citi said that it expected the shares to “trade up significantly,” saying the accelerating revenue and magnitude of sales outperformance are "especially impressive in a choppy second-quarter software demand environment."
The firm affirmed a neutral rating on Palantir with a $28 price target.
Related: Analysts adjust Palantir stock price target ahead of earnings
