Good afternoon. Welcome to Palantir’s Fourth Quarter 2020 Earnings Call. We’ll be discussing the results announced in our press release issued prior to the market open and posted on our Investor Relations website. During the call, we will make statements regarding our business that may be considered forward-looking within applicable securities laws, including statements regarding our first quarter 2021 and multi-year outlook, management’s expectations for our future financial and operational performance and other statements regarding our plans, prospects and expectations. These statements are not promises or guarantees and are subject to risks and uncertainties, which could cause them to differ materially from actual results. Information concerning those risks is available in our earnings press release distributed after market close today and in our SEC filings. We undertake no obligation to update forward-looking statements, except as required by law. Further, during the course of today’s call, we will refer to certain adjusted financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, GAAP measures. Additional information about these non-GAAP measures, including a reconciliation of non-GAAP to comparable GAAP measures, is included in our press release and investor presentation provided today. Our press release, investor presentation and SEC filings are available on our Investor Relations website at investors.palantir.com.

Welcome, Palantir had a very strong year last year and, because of the strength of that year, it might be worth taking a second and asking, well, what do the numbers actually mean? Obviously, on the face of them they’re strong and even curiously strong. We believe, I believe that Palantir’s numbers are a lagging indicator of several macro trends that we got right. First is the obvious macro trend that has almost become venality that the world is becoming a software world and the institutions that survive and thrive and provide benefits to their citizens, both in terms of actual output but also real output, meaning output that includes data protection to ensure that the data is actually preserved in a way that guarantees its veracity, which gives comfort to its citizens and ensures they aren’t merely a product to be monetized. Second, as diverse as the institutions we work in from clandestine services to providing AI in the most sensitive military context, to working with oil and gas companies, airlines, and pharmaceutical research, have all aspects of helping to ameliorate the plague that is COVID. There’s one trend: institutions, countries, individuals capable of assessing the value of software that can work now are the institutions that survive and provide value in the government, commercial, and even moral context—moral as defined by their increase in legitimacy of institutions. One primary issue we have in the West is the dearth of legitimacy of commercial and government institutions of experts. This makes it very difficult to navigate issues around how to rebuild your company internally and externally to conform and thrive in a very difficult context, where there’s COVID rebuilding the supply chain, political volatility, and a general skepticism about anything you say. That is a software problem. How do you actually look at the data? Understand that the data is actually true? Understand the veracity of the model? How can you prove to people that their data is not being abused, monetized, or used to discriminate against them? Were those on the call presumably trying to evaluate the actual value and meaning of our numbers? It’s very hard for them to understand this without grasping the actual background of the numbers. Are they a leading or a lagging indicator of a macro trend that you either got right or wrong? One interesting aspect of philosophy, history, and software is that when something becomes crucial to a society, absolutely determinative, it sets off a dialectic of learning. So, what we understand about how to procure software, use software, integrate into a world defined by software, is very different than what we would have thought about it when it was viewed as a luxury product. And that’s largely how software has been viewed here before. It’s something that can augment your enterprise, your government; it can enhance your enterprise slightly better than your competitor in myriad contexts. It can make you a military slightly more efficacious, slightly more transparent, or in some contexts, less transparent. It can make things more cost-effective, but that’s not the context we’re in now. We’re in a context where it is basically binary: institutions and societies which implement software effectively will dramatically outperform. In every context, whether military, clandestine, COVID, or any commercial entity we’re involved in. The real questions remain: what does it mean to survive in a COVID-like context, or how do you stop the next pandemic? In a Western context, where civil liberties and data protection are crucial, you can’t just re-orchestrate society and data management without buy-in from the people who nominally, or hopefully completely control society. Those are software problems. And the people in charge have to learn over time what it means when someone states that software works. What does it mean for software to be implemented effectively? What is the actual alpha? Is the alpha just the output, or is it also measured against moral imperatives that allow us to unify as a society? There’s a famous quote from Wittgenstein, which can roughly be paraphrased to mean that believing you’re following a rule isn’t the same as following a rule. This is typically used to explain an important trend in language philosophy. But you could also consider it in the context of software. Using software doesn’t mean you actually are using it. If software is absolutely determinative of current conditions, just as language was, you could philosophically argue there’s been a shift from language determining meaning; to software determining meaning, value, and legitimacy. Why do commercial and government institutions struggle with legitimacy? Because, in many cases, it’s hard to understand what the output is, how it happened, in what context, what was paid for it, and what did we receive? The structures we’ve built treat software as a cosmetic, augmentative attribute rather than understanding that software is the language of our time, and mastering it will determine what works and what doesn’t. The numbers you’ve seen are a reflection of our bet that this would happen. They are a lagging indicator. We believe the transformation occurring in the world now will accelerate. Our software delivery through Foundry/Gotham, and our ability to scale this through Apollo will be the way everyone at some point will approach software development. The dialectic of macro and micro conditions will drive change; the winners will figure this out.

On today’s call, you’ll hear from Alex Karp, Founder and Chief Executive Officer; Shyam Sankar, Chief Operating Officer; Dave Glazer, Chief Financial Officer; and Kevin Kawasaki, Global Head of Business Development. With that, I’ll turn it over to Shyam.

Thank you, Rodney. First, I’d like to congratulate the NHS and the UK for a stunningly successful vaccine rollout. The NHS is truly a national treasure. I’d also like to congratulate HHS protect on winning Gartner’s Eye on Innovation Awards for Government in 2020. Finally, I’d like to congratulate U.S. Space Force’s Kobayashi Maru, their cutting-edge software factory for winning the Software Innovation Team and Gears of Government Awards. To 2020 results. 2020 was a seminal year for Palantir. We helped 100 commercial organizations and 10 national governments respond to the COVID crisis. We were able to solve incredibly complex problems in three days and enabled our customers to reinvent themselves amidst these continuous shocks. But of course, that’s not just three days; it’s 15 years of product development, more than $2 billion on R&D, and three days. For many of those customers, we became their default operating system, becoming critical to the core functioning of their operations. In meeting that moment, our business grew significantly in 2020, resulting in 47% revenue growth for the full year. We have created and continue to create substantial opportunities for growth over the next year and beyond. Last week, we announced a groundbreaking partnership with IBM, where IBM will OEM a number of Foundry modules in its Cloud Pak for Data offering, enabling commercial customers to easily build AI-infused applications leveraging a trusted data foundation and enterprise AI. This partnership dramatically expands our distribution capabilities, leveraging IBM’s 2,500 sellers. For context, that sales force is larger than all of Palantir. Along with an already large installed base of Cloud Pak customers, we’re very excited about what this partnership means for our go-to-market in 2021 and beyond. Since the announcement, the response from prospective customers has been incredibly strong. There’s a lot of momentum and a lot of energy. We will continue to pursue channel partnerships to enhance our distribution. The product-driven momentum is clear and building across both segments of our business. We invested in technologies that would help our customers get value quickly and create enduring operational value that compounds. Continuously delivering upgrades to our software creates upgrades to our customers’ businesses. Our Foundry 21 launch represents the culmination of that work, where we’re automating away the complexity of integrating systems with a drag-and-drop interface. Frontline business users can build production-grade AI-infused applications. Modularity allows customers to take what they need and build on what they have. Archetypes bring point-and-click use cases to accelerate outcomes, all of which is part of how upgrading our software upgrades their business. As we move into 2021, these innovations are helping our customers generate value much faster and allowing us to broaden our go-to-market strategy. We expect to add a triple-digit headcount to our sales function this year. In our commercial segment, we generated greater than 100% U.S. revenue growth in 2020, driven by investments in our direct sales force. In the fourth quarter, we signed several large deals with customers across a variety of sectors, including automotive, energy, healthcare, insurance, mining, and shipping. We signed a multi-year enterprise agreement with Rio Tinto in the fourth quarter. This partnership culminates several Foundry deployments integrating data from across Rio Tinto’s operations, spanning over 90 systems, including machines, sensors, and instruments. These initiatives helped Rio Tinto transform their operations into a digital business across the value chain to increase production, enhance profitability, and connect people in Rio Tinto’s underground operations with data. Foundry will serve as both a single source of truth, combining operational and transactional data, and a digital twin that will enable Rio Tinto’s employees to make data-driven decisions and take action from headquarters to the mine face. We signed a multi-year contract with Pacific Gas and Electric to help streamline operations across the company. PG&E collects 10 billion data points every day, spanning both structured and unstructured data, which feeds the digital twin of PG&E’s network within Foundry to enable root cause analysis and upgrade monitoring. We expect this will allow them to improve electric operations and asset management, resulting in enhanced safety and grid reliability. PG&E will have a single integrated platform providing a complete operating picture to make fast effective data-driven decisions in its public safety power shutoff program, which will help mitigate future wildfire risks. This is just the beginning of our joint enterprise vision. We also signed a significant expansion with a Fortune 50 healthcare company in the fourth quarter. Across the healthcare industry, there are increasing market pressures ranging from reimbursements becoming tied to value-based care to increasing costs of pharmaceuticals and an expanding number of competitors. Managing unit profitability at a granular level becomes much more important in this environment. This customer faced the inability to model their complex contracting and pricing models in order to make actionable decisions for negotiations and payments management. This issue is wildly complex, as it involves managing the balance between revenue and cost of goods sold models, managing the network of suppliers, supply chain, labor, payers, and regulatory coefficients. By integrating these disparate sources into Foundry, the customer now has a contract management solution that automates this complexity, allowing them to focus on operational decision-making and outcomes. This has already led to $50 million in annual value. We continue to deepen our partnership with BP. In the fourth quarter, we signed a five-year, nine-figure enterprise renewal. We have worked with BP since 2014. Our software is the backbone of BP’s digital twin applications, generating over $1 billion of value in 2020. Our software will help BP continue its transformation as they move toward their net-zero ambition. These applications will accelerate BP’s initiatives in wind power, electric charging networks, solar power generation, and other initiatives to deliver energy more safely and efficiently for years to come. We’re also deepening our work with a Fortune 200 industrial manufacturing customer, rapidly evolving our relationship throughout 2020 to incorporate several use cases within Foundry. As a manufacturer of personal protective equipment, this customer faced substantial supply and demand shocks during COVID, accentuating the need to reimagine the firm’s supply chain management and order processing practices. After integrating its baseline supply chain performance models and order fulfillment records, the customer was able to act quickly and deliver PPE to those in dire need all in under a couple of weeks. They are now using our software to model supply chain scenarios and conduct forecasting and demand sensing to alert users to future bottlenecks and inventory risks. The net result is a decision-making engine at the intersection of a connected supply chain and connected manufacturing. Turning to our government segment, our Gotham 21 launch underscores our ongoing vision to provide the central operating platform for government, as well as our focus on the near-peer fight in the defense context. We made extraordinary progress on these initiatives in 2020 overall. The full-year government revenue rose 77%, led by ongoing momentum in the U.S. which grew 91%. As tremendous of a year as 2020 was for the government segment, we believe we are just at the tip of the iceberg and are well positioned to capture significant new opportunities in 2021 and beyond. Our intensive product investments in developing end-to-end sensor-to-shooter and space-to-mud capabilities are paying off. We are creating unique opportunities to empower warfighters with AI superiority, and that technology is starting to create large program opportunities across the services. Our partnership with the U.S. Army continues to expand. Vantage is a critical asset for the Army, supporting both readiness and financial management, freeing up $3.3 billion for reinvestment. In December, the Army exercised its first option year, and we are excited to continue this work with Army Vantage. We recently won new contracts with the Army to accelerate its modernization efforts. In November, Palantir was selected to provide a prototype for the Army’s common data fabric and security solution to support capabilities by 2023. This opportunity allows our software to be used in mission command, operating at the intersection of intelligence, planning, and execution. It is a true honor to aid the Army in its efforts to provide an integrated solution that will ultimately enhance access to critical data for commanders and soldiers, deliver efficient uses of networks in denied environments, and increase collaboration with joint and allied partners. In January, we were selected to deliver a prototype as part of the Army’s ground station modernization in support of the Titan program. Under the $8.5 million Phase 1 contract, Palantir will collaborate with the Army to demonstrate a solution that integrates aerial and terrestrial sensors for intelligence command and control. This overall solution, which carries a total potential contract value of $0.25 billion across all phases, will provide operators with shortened targeting timelines by incorporating data integration, sensor fusion, and advanced analytical capabilities using AI. We were built for this. Those years of product investments are coming to fruition. We look forward to continuing our work with the Army, as well as pursuing similar programs with other services. While many new 2020 U.S. defense opportunities started as crisis responses to COVID, almost all of it is relevant to enduring problems and needs. For example, we started working with the Air Force in May of 2020 to support their COVID response. This engagement has supported COVID-19 testing, PPE availability, and planning vaccine distribution, but it has also helped the Air Force understand fleet availability and combat readiness. In the UK, Palantir’s software powers three of the country’s most important national priorities: PPE, vaccines, and managing trade post-Brexit. In December, we signed a two-year contract with the NHS, worth up to $31 million, where Foundry will serve as the core platform for secure, reliable, and timely data processing to enable decision-makers to efficiently plan and distribute resources, improve patient care, and protect patient privacy. The highly successful UK vaccine program ordered, allocated, tracked, and delivered their vaccines in Foundry. While we continue to partner with the world’s leading healthcare institutions to combat COVID-19, we closed deals focused on supporting their ongoing transformation in a post-COVID world. In the fourth quarter, we expanded our relationship with the FDA with a three-year, $44 million contract. Our partnership with the FDA began in 2017 to aid the oncology center of excellence in regulatory research across clinical trial data. Over time, our relationship has evolved to include the Center for Drug Evaluation and Research, where we assisted in the fight against the opioid crisis and supported regulatory review activities. This new agreement will continue our work with the FDA in mission-critical enduring workflows, ensuring manufacturers comply with agency rules and regulations, which speeds up the time to market while maintaining the highest safety standards. There are also significant opportunities for further expansion as our work today touches only two of 16 centers and offices at the FDA. We closed out the year with strong momentum. In the fourth quarter, we signed many significant deals, 21 deals worth $5 million or more, including 12 deals each worth $10 million or more. In aggregate, we generated 47% annual revenue growth. We saw customer concentration and revenue concentration decrease even as the number of significant deals grew. Our pipeline is substantial and growing. These deals start in the acquisition phase of our three-phase model with new customers who have yet to even move into phase one; both groups have performed exceptionally, which is a very positive forward-looking indicator. Additionally, the intense growth of existing customers continued, with average revenue per customer increasing 41% to $7.9 million. We grew the number of accounts with $10 million of annual revenue or more by 50%. We continue demonstrating our ability to grow customer relationships at scale, pressing ever-increasing value to our customers’ enterprises. And it’s still very clear that we are just at the beginning. Our customers currently include only eight of the Fortune 100, 12 of the global 100, and only 24 of the global 300. The opportunity in front of us is immense and growing. Finally, I’d like to thank each and every team member for their exceptional efforts in 2020. You went where you were needed most—from the front lines of the vaccine to the factory floors of PPE manufacturers; from the briefing rooms of prime ministers to the war rooms where the nitty-gritty work actually got done. You built the products that met the moment, driving operational changes and support functions that executed the business. You supported each other through the ongoing trials and tribulations of the pandemic. You are all a constant reminder that not all who wander are lost. I am proud of what you accomplished and honored to call you coworkers. I’m very grateful for the joint opportunities that we have to make an impact. This truly is only the beginning. Thank you. Now to kick off the discussion on financial results, I’ll pass it off to Karp.

There are many insights; indeed, some secrets that have powered Palantir and got us from a company that at first no one believed would succeed, because we were heavily focused on strengthening the West through a near fanatical fixation on data integration and data protection. When we transitioned to the commercial world, people didn’t believe we would succeed because there’s no history of anyone going from government to commercial. When we became a global company, people didn’t think we would succeed, because typically, companies that started within the American government do not thrive abroad. When we executed our DPO, many thought we should IPO, because that is the best and quickest way to transfer money to Wall Street. However, we believe we should focus on allowing the average person to participate, thereby absorbing that risk. Now, as we’ve had a pretty sublime year based on any conventional metric, and as you’ve seen the results, we would like to underscore this relentless focus; what you could call an insight or secret; it should be considered venality in business, having a long-term focus on the health of what we believe is and will become one of the most important software businesses in the world. To do that, we’re providing long-term guidance, which is pretty radical. We are committing to maintaining a growth threshold of above 30% for the next five years, but not focused on the day-to-day, quarter-to-quarter near-term focus that, quite frankly, destroys businesses. This is one of the main reasons why so many of our businesses, especially in tech, are actually only serving Wall Street and not serving their clients and not serving an everyday investor. This creates suboptimal returns over time, as they are a lagging indicator of that suboptimal performance. Near-term, my optimism around running a business, and at Palantir, we've rejected this in every way, both from the way we’ve produced software, how we interact with clients, and I hope those on this call who are current investors stay with us. Those who prefer a more short-term focus, I suggest you choose companies that align better with your perspective.

Thanks, Karp. I’ll review our fourth quarter and full year 2020 performance followed by our outlook. Full-year 2020 revenue was $1.93 billion, up 47% year-over-year. Fourth-quarter revenue was $322 million, up 40% year-over-year, and roughly $21 million above the high end of our prior guidance range. Additionally, for the full year 2020, the average revenue per customer was $7.9 million, up 41% year-over-year. Average revenue from the top 20 customers was $33 million, up 34% year-over-year, with our top 20 customers representing roughly 61% of our total 2020 revenue, down from roughly 67% in 2019, as we continue to broaden our revenue and customer base. For the full year 2020, 43% of our revenue was generated from new customers in 2018 or later, exemplifying our improving ability to rapidly onboard customers to our software and realize compounding value as their data assets grow and used cases develop. We are scaling across our customer base. In 2020, the number of customers generating more than $1 million in revenue annually grew 32% year-over-year. Customers generating more than $5 million annually grew 54% year-over-year. And customers generating more than $10 million annually grew 50% year-over-year. In the fourth quarter alone, we closed 21 deals of $5 million or more in total contract value, including 12 deals worth $10 million or more. Looking at revenue by segment, government revenue accelerated in the fourth quarter, growing 85% year-over-year to $190 million. We signed several large deals in the quarter, including a three-year, $44 million expansion with the U.S. Food and Drug Administration and a two-year, $31 million agreement with the NHS. Additionally, we announced that the U.S. Army executed its first option year, totaling approximately $114 million as part of our partnership on the Army Vantage program. For the full year 2020, government segment revenue grew 77% year-over-year to $610 million and represented roughly 56% of our total revenue. Fourth quarter commercial segment revenue totaled $132 million, up 4% year-over-year, while full-year commercial segment revenue grew 22% year-over-year to $482 million, and we continue to see strong momentum in our U.S. commercial business heading into 2021. U.S. commercial revenue rose 107% year-over-year in fiscal 2020, aided by ongoing investments in our account-based sales force and channel partnerships. In the fourth quarter, we signed several large deals, including a nine-figure renewal with BP, exemplifying our software’s enduring impact and value even in a sector that has been fundamentally challenged of late. Also in the fourth quarter, we signed eight additional deals with at least $10 million in our commercial segment. I’ll next discuss our margins and expenses on an adjusted basis, which includes stock-based compensation. Fourth quarter adjusted gross margin was 84%, up 1,200 basis points versus the year-ago period, and full-year adjusted gross margin was 81%, up 1,000 basis points compared with full year 2019. The year-over-year improvement in gross margin was driven by increased automation and efficiency in the delivery of our software. Contribution margin was 62% in the fourth quarter, nearly double the contribution margin of 33% in the year-ago quarter, which highlights the efficiencies we have generated in customer acquisition and contract execution. Turning to our operating expenses, total fourth quarter adjusted operating expenses were $186 million, which includes approximately $19 million in employer payroll taxes related to stock-based compensation. Excluding these expenses, total fourth quarter adjusted operating expenses would have been $167 million. Fourth quarter operating income excluding stock-based compensation and related employer payroll taxes was $104 million, representing an adjusted operating margin of 32%. The outperformance in adjusted operating income was primarily driven by a higher than expected revenue quarter, continued efficiencies in our go-to-market strategy, delivery, and reductions in cloud hosting costs. Full year 2020 adjusted operating income, which excludes stock-based compensation, related employer payroll taxes, and non-recurring expenses related to our direct listing was $190 million, representing a margin of 17%. As we noted last quarter, we have historically pursued multi-year upfront payments from our customers, which has led to significant growth in contract liabilities in prior periods, as cash collections often exceeded revenue. Over the course of 2020, we moved away from collecting multiple years of upfront payments which has led to lower 2020 cash collections and a greater portion of our revenue coming from the recognition of such contract liabilities. We expect this to begin normalizing over the course of 2021 as cash collections and revenue start to align, driving positive cash flow from operations for the year. We measure revenue visibility across several metrics. First, we ended 2020 with a total deal value of $2.8 billion, while the year-end dollar-weighted average contract duration was 3.6 years. This growth rate is strong considering government customers entered into shorter-than-usual contracts in 2020 to accelerate procurement as they responded to the COVID crisis. Second, our remaining performance obligations as of December 31, 2020 stood at $597 million, up 124% year-over-year, while the current RPO increased 114% year-over-year. Though RPO provides a limited view into our business, with many of our contracts in government and commercial segments featuring termination for convenience clauses, the growth in these metrics is telling of ongoing momentum we are experiencing. Third, we look at the annual contract value booked in a year on a dollar-weighted duration basis. In 2020, the dollar-weighted annualized contract value we closed increased 49% year-over-year, providing a strong foundation for fueling growth in the coming years across our commercial and government segments. Looking at the business through our three-phase model, we ended the year performing strongly across all three cohorts. Our acquire phase customers ended 2020 generating $77 million in revenue, with a 17% contribution margin, nearly half of the revenue from these customers came in the fourth quarter. This rapid scaling and expanding contribution margin demonstrate the increasing efficiency of our customer acquisition and onboarding process. Expand phase customers continue to see growing value in our software platforms, yielding consistent upsell and cross-sell opportunities. These customers generated $360 million in revenue for the full year 2020 with a contribution margin of 47%. This represents over 100% year-over-year growth for this cohort and a contribution margin expansion from negative 43% in full year 2019. Finally, our scale-phase customers continue demonstrating a solid blend of growth and profitability. These customers generated $613 million in revenue and a 70% contribution margin in 2020, representing 8% year-over-year growth and a 1,500 basis points expansion in contribution margin compared with these customers in fiscal year 2019. Additionally, for the full year 2020, we generated $42 million in revenue from new customers, of which $19 million was recognized in the fourth quarter. This compares with $4 million in fourth quarter fiscal year 2019, representing 375% growth year-over-year. You heard from Karp about our long-term orientation. Moving into the future, we believe our investments will help us sustain elevated growth rates for the next five years and beyond. For our five-year outlook, we expect greater than $4 billion in revenue by 2025. Starting in 2021, we anticipate greater than 30% annual revenue growth each year for the next five years. In Q1 of this year, we expect revenue growth of 45%, or $332 million at the midpoint, and anticipate an adjusted operating margin of 23% for the quarter. With that, I’ll turn the call over to Rodney to open up Q&A.

Thanks, Dave. John, Dave and Kevin will join me for Q&A today. We’ll begin with some shareholder questions from, say, Shyam; I’ll start with you on this first question. Palantir is guiding for double-digit percentage growth this year. Can Palantir sustain such a compound growth rate, barring any unforeseen negative economic impacts or should investors expect choppy yearly growth numbers? Can you comment on a long-term expected growth rate?

I’ll build on what Karp said earlier in the call regarding long-term guidance. We are very much at the beginning here. We just did 45% growth in Q1 of 2021. We are only in 24 of the global 300. Looking at those numbers can overlook the point around the total addressable market (TAM) expansion currently happening. Look at the channel partnerships with Fujitsu and IBM among others, where we’re not just distributing to the top 300 or the top 1,000, but really, we have the ability to distribute to the entire market, potentially tens of thousands of customers. With our investments in end-to-end, sensor-to-shooter workflows from space to mud, we are not just pursuing the roughly $60 billion of government IT spend anymore; we’re talking about the quarter-trillion dollars of U.S. DoD weapon systems spend to come. Our product investments position us uniquely to seize those opportunities. Broadening the market is not just about Palantir life; it’s about Palantir Automated, and the power of Apollo; it’s about software that manages itself. Look at our archetypes investments; this means with a few clicks, you can deploy end-to-end powerful use cases that would have historically cost millions of dollars and taken many months, which can now be deployed in minutes. It’s all about software-defined data integration and modularity. This means that you get the complete power of Palantir, but with the ease of self-managing software. These are examples of why we’re confident in our long-term growth of exceeding $4 billion in 2025.

Great. So, the next question is on Demo Day, and I’ll stick with you, Shyam. Could you please share how Demo Day was received by potential customers and would Palantir experience a surge of interest in its products specifically in the commercial side of the business?

Yes, Demo Day was a hit with potential customers. We were very excited by the marked uptick in inbound inquiries, leading to some generative conversations with prospective customers. Demo Day really helped customers determine if they had a problem that Palantir could solve, which kept our growing sales force busy. It really underscores the tremendous opportunity in front of us and how much we are just at the beginning. One reflection I had about Demo Day is that we tried to present an all-purpose Foundry demo. But the truth is Foundry can solve many problems. We’re going to be hosting another event in April, Demo Day DoubleClick, to focus more on Foundry across industries and use cases. So, stay tuned for that formal announcement and registration details.

Great. Kevin, I’ll come to you on this next one. Will big company deals such as the IBM announcement become more common as Foundry’s price becomes more apparent to the public? Additionally, is there any chance of widely available, bullet-technical medium-sized businesses or consumer-level software?

Thank you, Rodney. Yes, we’re excited about this partnership as well. Regarding small and medium-sized businesses, in short, yes, Shyam just talked about how our total addressable market is expanding as we automate the delivery of Foundry. This means you can have full end-to-end use cases with no code, just drag and drop. The unit economics allow us to do this: 84% adjusted gross margin in Q4 last year, 62% contribution margin in Q4. Partnerships like IBM, adding salespeople to scale distribution just make a lot of sense.

Great. Shyam, I’ll come to you on this next one. It seems like most of your channel partnerships are focused primarily on the enterprise side of the commercial segment. What are the near-term opportunities to broaden the channel, and should overall growth in the government side be sourced directly?

We are aggressively pursuing partnerships with large primes, specifically targeting the divisions that build hardware platforms. The focus of these partnerships is to integrate Palantir’s unique AI capabilities, proven in the field, retrofitting them onto existing programs and incorporating them into future programs. We’re aiming for a situation where Palantir is integrated into every missile, every drone, every sensor, every shooter. This is a massive opportunity for both sides by creating high-margin, recurring software revenue streams. Talking with our prime partners, they see this as a revolutionary opportunity, especially in light of shrinking defense budgets, to boost their market capital. This expansion isn’t just about government IT spend, but about the significant DoD weapons system expenditure.

Great. Dave, I’ll come to you on this next one. In terms of profitability, when does Palantir expect to achieve a level where it can repeatedly achieve profitability? Does Palantir need to hit the targeted 6,000 Foundry clients along with other revenue sources from other platforms to become meaningfully profitable?

Regarding profitability, as Kevin just pointed out, I would highlight our margins today: 84% adjusted gross margin in Q4, 81% for the full year 2020, 62% contribution margin in Q4, and 54% for the full year 2020. We have demonstrated our unit economics this year despite 47% growth. Thus, we will continue investing in that growth as we see a massive opportunity ahead of us.

Great. Shyam, I’ll return to you before we open the call for more Q&A. While the IBM announcement is great, their public cloud share is relatively small. Can you commit to expanding managed offerings to other cloud providers, such as Microsoft Azure, AWS, Google Cloud, etc.?

Let’s start with Apollo, because it’s crucial technology. Apollo means that we can run our software efficiently anywhere: in your cloud, in my cloud, in their cloud—on a drone, on a Humvee, or even in space. The future customer should not need to worry about this; it will run wherever needed seamlessly. It’s essential to understand that the vast majority of our new customers are leveraging the speed, security, and reliability of our SaaS offering. We have committed to spending over $1 billion on cloud providers in operating offerings that scale with them. There are limits to how Elastic Compute is. We received calls we never anticipated; in one instance, a provider called us to inform they were out of servers. We are in active discussions with all these providers.

Great. Operator, we’ll now turn it over to you for our next question.

Certainly. Your first question comes from the line of Brent Thill from Jefferies. Your line is open.

Good morning. The $4 billion revenue target for 2025; can you walk through the assumptions that you are making to achieve that target, as well as what gives you the confidence to achieve it? This is obviously a big target, and few companies in the industry provide this type of guidance. Could you clarify?

You bet. Thanks, Brent. Starting off by reiterating some numbers: Yes, we had 47% revenue growth last year, and expect to do 45% this year. What’s fueling this growth gives us confidence as we move forward. The product investments we’ve made, along with our direct sales force and channel partnerships, fuel distribution. You can see this in the data: 110% revenue growth in our U.S. commercial market, 91% growth in U.S. government, and revenues from new accounts grew 375%. Our acquire-phase customers grew over 200% in the latter half of 2020. The expand-phase customers were roughly 100% growth. This demonstrates strong momentum in our new account pipeline and overall performance.

Your next question comes from the line of Keith Weiss from Morgan Stanley. Your line is open.

Thanks, everyone, for taking my question. And it was a nice quarter. I think this is probably for Dave. Can you help us understand the volatility in revenue growth? It appears that commercial revenue growth slowed down in Q4 versus Q3; despite strong yearly results. Could you clarify the source of this volatility? Software investors typically expect smooth revenue trends. Secondly, in terms of OpEx, adjusted OpEx was down almost 30% year-on-year in the quarter, and down 20% for the year. Given the vast opportunity, why are you investing at such a low pace?

I’ll tackle that. Keith, what you’re seeing is the payoff of our long-term investments in the product. Last year, Apollo delivered a massive step change in the efficiency of both revenue costs and our sales and marketing efficiency, too, shrinking the duration of pilots and the investment required, which drove down the cost of sales and revenue. Our direct sales force has paradoxically reduced our unit costs around sales and marketing, making it cheaper to acquire customers. You should expect to see significant investments in our operation as we keep moving forward but at a much more efficient base.

Your next question comes from the line of Christopher Merwin from Goldman Sachs. Your line is open.

Thanks for taking my question. I want to discuss the modularization of Foundry. Given how powerful the platform is, your pre-packaging of needed solutions sounds more accessible than ever. How might this shift your competitive position? Are you primarily focusing on use cases generally not served by other horizontal DoD spenders currently?

Thanks, Chris, that’s a great question. We’re very much focused on modularizing Foundry to create unique offerings underneath it. I’ve personally discussed these modules with customers and there’s tremendous excitement around this approach, as it can leverage existing investments they’ve made while accelerating their modernization journey using our unique components. We’ll continue offering modules that we perceive as unique, allowing us to meet our customers where they are.

Your final question comes from the line of Brad Zelnick from Credit Suisse. Your line is open.

Thank you so much, and congrats on the results. I wanted to ask about the triple-digit growth in sales headcount you mentioned. Could you remind us how much demand in Q4 or in 2020 was captured explicitly by sales heads versus forward-deployed engineers? How should we consider the hiring cadence and productivity ramp of the new reps you're intending to hire?

About half of incremental growth is being driven by our investments in the direct sales force and channel partnerships, and we expect that to grow significantly. In places like U.S. government and U.S. commercial, that is much more than half. The productivity ramp is encouraging; we’re seeing marked compression in time taken to make new representatives productive. Despite the increasing demand in the market and more inbound inquiries, we’re excited about the prospects for ramping the new representatives quickly.

That concludes the Q&A. Thank you all for joining, and you may now disconnect. Have a wonderful day, everybody.