Palantir reported a massive third-quarter earnings report on Monday, with revenue growing 96% year over year to $2.31 billion and beating analysts' expectations. The company's adjusted earnings per share reached $0.44, surpassing the anticipated $0.41, while U.S. commercial revenue exceeded U.S. government revenue for the first time ever at $984 million.
Despite the strong financial results, retail investors reacted lukewarmly due to signs of slowing enterprise sales growth. Palantir closed $1.46 billion in total contract value from U.S. enterprises during the quarter, marking a decline from the record-setting $2.13 billion reported in the previous quarter. CEO Alex Karp explained that enterprises are moving quickly to deploy AI software through short-term trials rather than lengthy bureaucratic commitments.
Corporations are rapidly adopting Palantir's AI software to securely run frontier models and custom-train open-weight models without exposing proprietary data. While this enables faster deployments and contract expansions, it also introduces a higher risk of contract cancellations if short-term trials do not convert.
This earnings report matters because it highlights the shifting enterprise AI landscape, where corporations eagerly test new technologies but demand greater flexibility through short-term commitments.