Palantir’s Quarterly Loss Widens in First Public Results

(Bloomberg) -- Palantir Technologies Inc., in its first financial results since going public, reported skyrocketing third-quarter losses as compensation costs surged.

Palantir also boosted its revenue growth forecast for this year to 44%, totaling $1.07 billion and just exceeding the amount analysts expected on average, according to data compiled by Bloomberg. It also increased its 2020 forecast for an adjusted operating profit to $130 million to $136 million. The stock was little changed in extended trading after closing at $14.58 in New York.

The company, which sells data analysis tools to governments and companies, reported a loss of $853 million, compared with $140 million in the same period a year ago. Palantir said its operations were profitable when excluding stock-based compensation and various other expenses.

Since starting up in 2003, Palantir has operated with little attention to profits. Peter Thiel, the co-founder and chairman, helped bankroll the business throughout its long period as a privately held business.

The Denver-based company, which makes software to manage and analyze data, has seen demand surge during the coronavirus pandemic. Operation Warp Speed, the Trump administration initiative to deliver vaccines to Americans, uses Palantir, as do various health agencies in the U.S. and around the world. The company told Bloomberg Businessweek it signed more than 100 deals in the first few months of the pandemic.

Palantir has been tightly associated with President Donald Trump, thanks in large part to Thiel’s coziness with the president. The company went public in late September, barely a month before Election Day.

But investors were optimistic about Palantir’s prospects after Joe Biden was elected president. The stock is up 39% since Election Day.

Biden is expected to cut military spending, which could benefit cheaper, ready-made options like Palantir’s, according to Mark Cash, an analyst at Morningstar. “The company has been a U.S. government contract award winner in Democratic and Republican administrations,” Cash wrote in a note to clients.

On a call with investors, Palantir Chief Operating Officer Shyam Sankar said that the company did not foresee “any change” would result from the transition to a new president.

Palantir’s chief financial officer, David Glazer, said revenue from governments grew 68% to $163 million during the third quarter, thanks mainly to deals in the U.S. Palantir’s commercial revenue grew 35% year-over-year to $127 million. Sankar said that the company’s efforts to build its sales staff starting last year had paid off, and that it was considering tripling the number of people handling direct sales.

Palantir reported an adjusted operating profit of $73.1 million on revenue of $289 million during the quarter that ended in September. Analysts expected adjusted operating income of $62.9 million on revenue of $279 million, according to data compiled by Bloomberg.

For next year, Palantir maintained an earlier forecast that revenue growth would exceed 30%.

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