Palantir’s third quarter of 2025 marks a turning point that redefines the company’s scale, ambition, and competitive position. The explosive demand for its AIP platform in the United States triggered the fastest revenue acceleration in Palantir’s history, pushing commercial adoption to levels few investors imagined even a year ago. What once looked like a promising tool has now evolved into a full enterprise operating system, attracting record-breaking contracts and delivering margins that underline how efficiently the model now scales.
At the same time, Palantir is proving that its transformation goes far beyond government analytics. The company is rapidly becoming a core AI infrastructure provider for corporations that need real-time decision engines, integrated data environments and secure automation. With unprecedented contract volume, cash generation at historic highs and a sharply expanding customer base, Q3 2025 positions Palantir among the most powerful forces in enterprise AI — a company no longer judged by potential, but by execution.
How was the last quarter?
The third quarter of 2025 represented an unprecedented growth explosionfor Palantir $PLTR, breaking all previous records. Revenues grew 63% year-over-year to $1.181 billion, the fastest growth rate in many years and a confirmation of the rapid rise of AIP. The sequential growth of 18% is among the highest in the company's history - all in an environment where most software companies are experiencing a slowdown or stagnation. The key driver of growth is clearly the United States, where total revenue grew 77% year-over-year and 20% sequentially.
However, the pace of the US commercial division is quite extraordinary. Here, Palantir achieved growth of 121% year-on-year and 29% quarter-on-quarter, confirming that demand for AIP in the corporate sector is reaching strategic proportions. U.S. commercial sales reached $397 million, while the U.S. government segment grew to $486 million on 52% growth. Contract strength is even more pronounced: Palantir closed a record $2.76 billion in TCVs, up 151% year-on-year. Of that, $1.31 billion is purely US commercial contracts - a growth of a whopping 342%.
The company also dramatically expanded future contracts. U.S. commercial remaining deal value grew to $3.63 billion, up 199% year-over-year. The customer base grew 45% year-over-year and 7% sequentially, with the firm closing 204 contracts over $1 million, 91 contracts over $5 million and 53 contracts over $10 million in Q3.
In terms of profitability, the quarter was equally impressive. GAAP operating income was $393 million with a 33% margin, while adjusted operating income was $601 million with a 51% margin. GAAP net income was $476 million (40% margin) and adjusted net income was $528 million. Free cash flow was $540 million with a margin of 46%. Palantir thus reaffirmed its exceptional ability to scale growth without losing margins - which is unique in the AI sector.
Another significant indicator is Rule of 40, which achieved extraordinary 114 %which puts Palantir among the absolute top AI companies in terms of the combination of growth and profitability.
Full presentation with results.
CEO commentary
Alex Karp described the quarter as "transformational", noting that the combination of AIP and broad-based demand in the US is creating an entirely new growth profile for the company. He highlighted that the company is achieving such high sequential growth for the first time, calling it "the highest in Palantir's history". According to Karp, AIP is not just a product, but a multiple accelerator of companies' ability to deploy AI in real-world operations. The CEO explicitly stressed that Palantir today "sees demand that far exceeds our historical goals."
His tone was distinctly confident, almost aggressive - especially in the context of US commercial expansion. Karp also indicated that government contracts remain a stable base, but the main boom is now coming from the private sector, a strategically new and very positive phase for Palantir.
Outlook
Palantir raised full-year guidance on virtually all key metrics. For Q4, it expects revenue of $1.327-1.331 billion and adjusted operating profit of around $695-699 million. The firm is raising full-year revenue to $4.396-4.400 billion, with the U.S. commercial division expected to exceed $1.433 billion - more than 104% growth.
Adjusted operating profit for 2025 is expected to reach $2.151-2.155 billion and free cash flow $1.9-2.1 billion. The company also reaffirms that it will report GAAP earnings in every quarter of the year.
Long-term results
Long-term data paints a consistent and accelerating growth profile. Revenues grew nearly 29% to $2.865 billion in 2024, following previous growth of 17% and 24% in 2023 and 2022, respectively. Gross profit reached $2.3 billion in 2024 (+28%), indicating very stable gross margins. Operating profit has changed dramatically in three years: from a deep loss in 2021 (-411 million) to a profit of 310 million in 2024 (+159% YoY).
Net profit has increased from a deep loss in 2021 (-520 million) to 462 million in 2024 - +120% YoY. EBITDA and EBIT are also improving dramatically, confirming the structural change in the company's profitability. The share count is growing, but at a pace consistent with the standard stock-based compensation regime in the technology sector.
News
Palantir continued its aggressive expansion of AIP in the past quarter, signing a record number of large contracts across the industry and further strengthening its presence in the defense sector. The company expanded its collaboration with several US agencies, and strengthened its position in the energy, logistics and healthcare sectors. There is also rapidly growing interest in AIP in the banking and insurance sectors, where companies are demanding systems capable of automation, data linkage and prediction.
Also significant is the expansion of partnerships with large corporations, which are beginning to implement AIP in broader parts of their infrastructure. Palantir is becoming a key supplier of comprehensive AI infrastructure - not just a tool for data analytics.
Shareholding structure
Institutional investors hold more than 60% of Palantir's shares, confirming that the company has become a widely accepted part of large portfolios. The largest shareholders are:
- Vanguard Group - 213.9 million shares (9.8%)
- BlackRock - 188.5 million shares (8.6%)
- State Street - 101.3 million shares (4.6%)
- Geode Capital - 53.4 million shares (2.5%)
Insider holdings are 3.6%, which is consistent with the stable structure typical of technology firms of this size.
Analyst expectations
Analysts were expecting strong results, but the firm significantly outperformed on all metrics. Wall Street has been gradually raising price targets, with the consensus moving higher after earnings - thanks largely to the explosion of the U.S. commercial segment. Investors appreciate the combination of high growth, profitable operations and robust cash flow.
Many analysts say Palantir is one of the few companies that can monetize AI not just through models, but through a complete enterprise infrastructure. AIP is the same breakthrough for Palantir today that AWS was for Amazon or the iPhone was for Apple.