Palantir's US Commercial Revenue Overtakes Government Sales for the First Time

Total revenue rose 96% year on year and 20% from the previous quarter to $2.313 billion, the first time quarterly sales have topped $2 billion. TechCrunch reported that analysts had expected $2.18 billion. Adjusted earnings per share were $0.44, ahead of the $0.41 analysts expected, and GAAP net income was $1.128 billion, a 49% margin. Palantir put its "Rule of 40" score, which adds revenue growth to profit margin, at 158%.

The company raised its full-year 2026 revenue guidance to between $8.530 billion and $8.534 billion and forecast fourth-quarter revenue of $2.649 billion to $2.653 billion. It now expects US commercial revenue for the year to be "in excess of $3.559 billion, representing a growth rate of at least 143%," and raised its adjusted free cash flow forecast to between $4.8 billion and $5.0 billion.

A Slowdown in Signings

The shares slipped slightly on Tuesday despite the results. TechCrunch pointed to signs that enterprise deal-making, Palantir's main growth driver, is slowing. The company closed $1.463 billion of US commercial total contract value in the quarter. That was 11% more than a year earlier but well below the record $2.13 billion it signed in the second quarter. Total contract value across the business was $2.918 billion, up 6% year on year.

On the earnings call, chief executive Alex Karp described a shift in how companies are buying. "What Ryan and I are seeing on the front line and commercial is this much quicker interaction, much quicker to deployment, shorter duration of the contract but then an ability to expand that contract dramatically," he told analysts. Karp played down the risk of losing customers. "Once you go Palantir, you don't go back," he said.

TechCrunch said the pattern is common in enterprise AI right now: companies are willing to try AI software quickly, without their usual procurement process, but are also quicker to cancel contracts.

Why It Matters

Palantir built its business on defence and intelligence work, and its US government revenue is still growing fast. The crossover shows how much its commercial growth now depends on companies that want to run frontier models and custom-train open-weight models on their own data without handing it to outside AI labs, along with Palantir's practice of embedding its own engineers with customers.

For executives watching the enterprise AI market, the numbers point two ways. Spending is rising quickly, but shorter contracts and a quarter-on-quarter fall in signings suggest buyers are testing before they commit to long deals. Many large companies sign their biggest technology contracts in the final quarter of the year, so Palantir's fourth-quarter bookings will show whether the third-quarter dip in signings was a pause or a trend.