Palantir (PLTR) Revenue Breakdown – Government And Commercial

Software application. Pexels Images.

Palantir Technologies Inc. (PLTR) is a public American company that specializes in software platforms for big data analytics.

Founded in 2003 by Peter Thiel, Stephen Cohen, Joe Lonsdale, and Alex Karp, Palantir is headquartered in Denver, Colorado. The company’s name is derived from “palantíri,” the magical seeing-stones in J.R.R. Tolkien’s “The Lord of the Rings.”

This article looks at Palantir’s revenue breakdown by segment. Palantir’s businesses consists of two divisions: Government and Commercial. Palantir derives slightly higher revenue from its Goverment division. However, the company’s Commercial segment has experienced much higher revenue growth in recent years.

Let’s look at the details!

Investors interested in Palantir’s specific statistics may find more resources on these pages: Palantir revenue by country, Palantir profit breakdown by segment, and Palantir debt.

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Definitions Of Segments

To help readers understand the content better, the following terms and glossaries have been provided.

Government: Palantir’s Government division refers to its business operations involving contracts and services provided to government agencies, primarily in the United States. Here are some key points:

Contracts and Services: Palantir provides a range of services, including data analytics, artificial intelligence (AI) platforms, and software solutions for military and defense purposes. For example, Palantir recently won a $100 million contract from the U.S. Department of Defense for AI tools that identify targets for air strikes.

AI Platform: Palantir’s Artificial Intelligence Platform (AIP) is a key product in this segment, enabling government agencies to analyze vast amounts of data and derive actionable insights.

Commercial: Palantir’s Commercial segment focuses on providing data analytics and artificial intelligence (AI) solutions to businesses and organizations outside of the government sector. Here are some key points:

Product Offerings: Palantir’s commercial clients benefit from its Artificial Intelligence Platform (AIP), which helps organizations analyze large datasets and derive actionable insights.

Customer Base: The Commercial segment includes a diverse range of clients across various industries, such as finance, healthcare, manufacturing, and technology.

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How Does Palantir Generate Revenue?

Palantir generates revenue through several key streams, primarily focusing on its software platforms and services. Here are the main sources of revenue:

Revenue Streams:

1. Software Licensing: Palantir charges clients licensing fees for access to its powerful data integration and analytics platforms. These fees are typically recurring, providing a steady stream of revenue.

2. Professional Services: In addition to software, Palantir offers consulting and implementation services. These services help clients integrate Palantir’s platforms into their existing systems, ensuring optimal performance and maximizing the value derived from the data analytics solutions.

3. Long-Term Contracts: Particularly in the government sector, Palantir secures long-term contracts that provide predictable and stable revenue. These contracts often include not just software licensing, but also ongoing support and customization services.

4. Subscription-Based Models: For its commercial clients, Palantir often employs a subscription-based pricing model. This allows companies to pay for the software on a monthly or annual basis, aligning the costs with their budget cycles and usage patterns.

5. Data Integration and Migration: Palantir assists clients in migrating their existing data to its platforms, ensuring a seamless transition. This service is particularly valuable for organizations with complex data environments, and it often comes with additional fees.

By leveraging its unique products and strategies, Palantir effectively generates revenue and supports its growth objectives.

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Palantir Business Model

Palantir’s business model revolves around empowering organizations to make data-driven decisions by providing powerful software platforms and services. The company focuses on collaboration and integration, helping clients solve complex problems and improve their operations.

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Total Revenue

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Palantir generated total revenue of $2.2 billion in fiscal year 2023, up more than 10% from a year ago. In fiscal year 2022, Palantir made $1.9 billion in revenue and produced total revenue of $1.5 billion in 2021.

Since fiscal year 2019, Palantir’s total revenue has grown nearly threefold, rising from $700 million in 2019 to over $2.2 billion as of 2023.

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Revenue From Goverment And Commercial Segments

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Palantir’s segments consist of Government and Commercial. The definitions of Palantir’s segments are available here: Government and Commercial.

Palantir generates much higher revenue in the Government segment than the Commercial segment, as shown in the chart above.

In fiscal year 2023, Palantir’s revenue from the Government division reached a record figure of $1.2 billion, while the Commercial segment took in $1 billion.

Compared to the revenue in 2022, Palantir’s 2023 revenue in the Government division was 14% higher. However, Palantir’s revenue from the Commercial division grew at a sunning figure of 20% in 2023 over 2022.

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Percentage Of Revenue From Government And Commercial Segments

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Palantir’s segments consist of Government and Commercial. The definitions of Palantir’s segments are available here: Government and Commercial.

In general, Palantir’s Governemnt segment accounts for a much revenue contribution than the Commercial segment.

In fiscal year 2023, Palantir’s Government segment contributed 55% of sales to the total, while the Commercial segment represented 45%.

Since fiscal year 2019, the revenue contribution from Palantir’s Government segment has risen from 46.5% in 2019 to 54.9% as of 2023.

On the other hand, Palantir’s Commercial segment has dropped from 53.5% in 2019 to 45.1% as of 2023. However, due to the faster revenue growth in the Commercial division over the last few years, Palantir’s revenue contribution from the Commercial segment has soared from 41.8% in 2021 to 45.1% as of 2023.

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Growth Rates Of Total Revenue, Revenue From Government, And Commercial Segments

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Palantir’s segments consist of Government and Commercial. The definitions of Palantir’s segments are available here: Government and Commercial.

Overall, Palantir’s revenue growth has significantly slowed in recent years, as depicted in the chart above. For example, Palantir’s total revenue growth was only 16.7% in fiscal year 2023, the lowest rate ever measured since 2020.

Similarly, Palantir’s revenue growth in the Government segment measured just 14% in fiscal year 2023, also the lowest in four years. On the other hand, Palantir’s Commercial segment grew 20% in fiscal year 2023, which was much higher than the growth rate of Government division.

On average, Palantir’s revenue growth was 27% per year between fiscal year 2021 and 2023 for total revenue, while it measured a similar rate in the Government, which came in at 27% between fiscal year 2021 and 2023.

Palantir’s Commercial segment has grown by 28% per annum on average between fiscal year 2021 and 2023, slightly above the average growth rate of the Goverment division.

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Conclusion

To recap, Palantir gets slightly higher revenue from the Government segment. The revenue contribution from the Government segment totaled $1.2 billion in fiscal year 2023 or 55% of the total.

On the other hand, Palantir’s Commercial segment contributed 45% of revenue to the total in fiscal year 2023, or $1 billion in terms of monetary figure.

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References and Credits

1. All financial figures presented in this article were obtained and referenced from Palantir’s annual reports which are available in PLTR Financial Reports.

2. Pexels Images.

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Disclosure

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