Palantir raises annual forecast after second-quarter revenue jumps 93%

Palantir Technologies has reported a sharp rise in second-quarter revenue and lifted its full-year outlook, sending its shares more than 14% higher in after-hours trading. The company said revenue reached $1.94bn in the quarter, up 93% from a year earlier. It said the growth was driven by strong demand from both commercial customers and government agencies.

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Chief executive Alex Karp said the quarter was "otherworldly" and said US commercial revenue grew 149% year on year. In a letter to shareholders, he said the business was compounding at a pace and scale the company had not seen before. Palantir also raised its annual revenue forecast to between $8.15bn and $8.158bn, up from a previous range of $7.65bn to $7.662bn.

The company said its US government business remained a major contributor, with revenue from that segment rising 90% year on year to $809m. Palantir has multibillion-dollar contracts with US government agencies, including the US Army. Its results therefore matter not only to investors watching the artificial intelligence sector, but also to public-sector customers that have become central to its growth.

The earnings update comes as Palantir continues to face criticism over its work with the US and Israeli governments and its role in military technology. The company opened its first office in Israel in 2015 and later expanded its work with the Israeli military. After what it described as a strategic partnership with Israel in January 2024, it significantly expanded operations supporting Israel's military campaign in Gaza and operations in the occupied West Bank.

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Palantir was founded in 2003 by technology entrepreneurs including Karp and Peter Thiel, and has built its business around data analytics and artificial intelligence tools for government and commercial clients. The company's growth has made it one of the more closely watched names in the sector, particularly as investors assess how demand for AI software is translating into revenue. At the same time, its contracts and partnerships have kept it under scrutiny from critics who question how its technology is being used.

What remains unclear is how long the current pace of growth can be sustained and whether the company's expanded forecast will be met in coming quarters. Investors will also be watching for further detail on the balance between commercial and government demand, as well as any response to continuing criticism of its defence-related work. For now, the latest results point to strong momentum, even as the company remains at the centre of wider debates over AI, security and military use.

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