Earnings Call Transcript - PLTR Q1 2024

Ana Soro, Finance Team

Good afternoon. I'm Ana Soro from Palantir's finance team, and I'd like to welcome you to our first quarter 2024 earnings call. We'll be discussing the results announced in our press release issued after the market closed 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 second quarter and fiscal 2024 results, 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 the market closed 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 other earnings materials are available on our Investor Relations website at investors.palantir.com. Over the course of the call, we will refer to various growth rates when discussing our business. These rates reflect year-over-year comparisons unless otherwise stated. Joining me on today's call are Alex Karp, Chief Executive Officer; Shyam Sankar, Chief Technology Officer; Dave Glazer, Chief Financial Officer; and Ryan Taylor, Chief Revenue Officer and Chief Legal Officer. I'll now turn it over to Ryan to start the call.

Ryan Taylor, Chief Revenue Officer & Chief Legal Officer

We started the year exceedingly strong with revenue of $634 million, an increase of 21% year-over-year driven by the momentum of AIP and our continued strong performance in U.S. commercial. Our results also highlight the growing strength of our U.S. government business and our enduring mission-critical work. The continued interest in AIP is loud and clear in the conversations I'm having across our customer base. We've shared our plans to capture the market with AIP, and our results show that our strategy is not only succeeding, it is accelerating. While still early days, our focus is on building the foundations of a long-term business. We intend to relentlessly continue landing new customers and subsequently expanding those engagements as our products gain traction and have meaningful impact within enterprises. Not only are we increasing the volume of new customers, but I'm pleased with our ability to grow these new customers as well. With regards to landing new customers, we've sustained our high volume of boot camps with over 915 organizations participating to date to meet inbound demand. We are also seeing substantial deal cycle compression. As one example, a leading utility company signed a 7-figure deal just 5 days after completing a boot camp. Another customer immediately signed a paid engagement after just one day of their multi-day boot camp and then converted to a 7-figure deal 3 weeks later. We expect the favorable unit economics and higher throughput to continue to accelerate our business. U.S. commercial is where we're seeing the greatest transformation. While Q1 is seasonally our slowest quarter, AIP adoption by new and existing customers helped drive notable growth in customer acquisition and revenue in our U.S. commercial business. In Q1, we added 41 net new customers in U.S. commercial. Our customer count increased 69% year-over-year and 19% quarter-over-quarter, compared to 8% quarter-over-quarter growth in Q1 2023. Excluding strategic investments, our U.S. commercial revenue soared by 68% year-over-year and 22% quarter-over-quarter. New customers span a variety of industries, as AIP's applications seem endless, from the largest independent bottling company in the U.S. to a leading energy and infrastructure company and a multinational airline. In Q1, our U.S. commercial business had customers from 56 of the 74 gigs industries. As we're landing new customers, we're also seeing those customers expanding their work with us. Across my conversations with customers, I've seen the recurring theme of them asking me how they can do more, faster with enterprise transformations driven by AI. We're showing them how they can move their AI strategy beyond chat. Existing customers such as Lowe's, Cleveland Clinic and General Mills, among others, are realizing the extensive possibilities of AIP within their own enterprises and increasing their scope accordingly. Lowe's accelerated its engagement from a starting point of no AI to utilizing production level AI for over 1,000 customer service agents, resulting in a 75% reduction in overdue tasks, as one of its directors noted, 'We achieved this in just 4 months and onboarded 1,000 users within 3 weeks of rollout.' Cleveland Clinic committed to a 10-year expansion deal to deploy more broadly across its hospitals. General Mills expanded the scope of its work further last quarter as its Senior Director noted, 'We're saving on average about $14 million annually, and it's really only deployed to part of our network as we speak.' We're seeing rapid expansions within key customer accounts. For example, a Fortune 500 industrial company signed a 3-year expansion deal, which increased the annual revenue run rate of our work with them nearly fivefold compared to our initial engagement with them in 2022. A Fortune 100 retail company started a pilot in Q2 2023, expanded to a use case conversion in August and expanded its work to a $12 million ACV enterprise engagement last quarter. These are just a few examples. More and more customers are expanding their work with us due to AIP and the incredible traction our software has within their organizations. Turning to our U.S. government business. Our revenue continued to accelerate last quarter, increasing 8% quarter-over-quarter versus 3% quarter-over-quarter in Q4, with our products every day having critical impact on current world events. We see continued demand for Mission Manager and positive reception to First Breakfast. Last quarter, we were honored the U.S. Army awarded Palantir over $178 million to be the sole prime contractor to build a next-generation targeting node under the TITAN program. This marks the first time that a software company has won a prime contract for a hardware system and exemplifies Palantir's position as the software prime, opening the door to vast new opportunities. It is with immense reverence that we approach building and maturing our revolutionary capabilities for our war fighters. In our international government business, we are continuing to ramp up the critical work for delivery of the U.K. NHS federated data platform as well as providing defense capabilities to Allied Partners around the world. Looking at our business and its impact broadly, I'm invigorated about the year ahead. We have never had more conviction about AIP and the power of our software as well as our continued efforts supporting the most critical missions around the globe. I'll now turn it over to Shyam.

Shyam Sankar, Chief Technology Officer

Thanks, Ryan. The clear signal from AIP boot camps is that AI is for builders, so many anecdotes and quotes from customers all reinforcing the same point. They are getting more done in a day or two in AIP than in a quarter or two without. We have pioneered the approach to getting beyond chat and unlocking the value of LOMs in the enterprise, taking inherently unstructured inputs that are flying around the enterprise, be it emails, Slacks, PDFs, images, comments, audio and turning them into structured actions and outputs; taking an email from a customer requesting a different product mix and turning it into an actual inventory allocation in the ERP system of record; taking a health claims denial and programmatically generating the documentation and supporting evidence from the clinical records and contracts; automating P&C insurance claims processing and even in government using vision models to narrow candidate products driving foodborne outbreaks at CDC; and we have started rolling out Build with AIP, a series of developer and builder-oriented tutorials and reference implementations that enable builders to ramp quickly on the primitives and power of AIP and practical examples that unlock every employee at every customer. Our growth is being driven by the incredible dynamism of the U.S. commercial market, and we believe the U.S. government will follow. With this momentum, we have launched builder boot camps in the U.S. government. The U.S. Army recently issued a memo identifying two Palantir systems, AIDP and Army Vantage as amongst the five total platforms approved for builders. The U.S. Army's Artificial Intelligence Integration Center, AI2C at Carnegie Mellon, leverages these platforms for half of their active projects and recently built an application for the 18th Airborne core with OSDK. Our DoD customer recently hosted a hackathon showing the value of the open joint all-domain command and control or JADC2 SDK that we have been pioneering. One participant commented, nominating targets with GAIA assist turns a 6-hour workflow into 10 seconds. We continue to invest in Mission Manager, and we'll be extending it to the edge with our Edge X infrastructure and U.S. government. Now customers can use their cloud instance as an integrated development environment for edge platforms, centrally build, test and continuously deploy and manage multi-vendor big tech edge ecosystems. It covers everything from streaming pipelines, OSDK-backed applications, native Gotham applications and third-party apps. We are excited with our team of rockstar partners to deliver on the U.S. Army's Titan program. This marks the first time a software company has won a hardware contract, firmly establishing the role of the software prime. We believe the core of this software target workbench will be critical in every cockpit, every vehicle and every ship. Finally, I'd like to acknowledge the eye-watering work of our service members and our allies in meeting the moment defending against the massive Iranian attack on Israel. The Gotham investments in JADC2 performed excellently, and we're building even more, even faster. I'll turn it over to Dave to take us through the numbers.

David Glazer, Chief Financial Officer

Thanks, Shyam. Q1 was a strong start to the year. Revenue growth accelerated to 21% year-over-year in the first quarter, driven by momentum in AIP and our U.S. commercial business and a reacceleration in our U.S. Government business. We delivered our sixth consecutive quarter of GAAP profitability, generating a record $106 million of GAAP net income in the first quarter. We also delivered our fifth consecutive quarter of GAAP operating profit, generating a record $81 million of GAAP operating income in the quarter. Adjusted operating margin expanded to 36% in the first quarter continuing to highlight the strong unit economics of our business. The revenue and profitability outperformance drove a 3-point sequential increase to our Rule of 40 Score from 54 in the fourth quarter of 2023 to 57 in the first quarter of 2024. This was the third consecutive quarter of an expanding Rule of 40 Score. Turning to our global top line results. We generated $634 million in revenue in the first quarter, up 21% year-over-year and 4% sequentially, exceeding the high end of our prior guidance. Excluding the impact of revenue from strategic commercial contracts, first quarter revenue grew 24% year-over-year and 4% sequentially. Customer count grew 42% year-over-year and 11% sequentially to 554 customers. Revenue from our largest customers continues to expand. First quarter trailing 12-month revenue from our top 20 customers increased 9% year-over-year to $55 million per customer. Now moving to our commercial segment. First quarter commercial revenue grew 27% year-over-year and 5% sequentially to $299 million. Excluding the impact from strategic commercial contracts, first quarter commercial revenue grew 36% year-over-year and 4% sequentially. We had a very strong quarter of commercial bookings. First quarter commercial TCV booked was $505 million, representing a 187% growth year-over-year. Our U.S. commercial business continues to see unprecedented demand driven by momentum from AIP. First quarter U.S. commercial revenue grew 40% year-over-year and 14% sequentially to $150 million, surpassing international commercial revenue for the first time. Excluding revenue from strategic commercial contracts, first quarter U.S. commercial revenue grew 68% year-over-year and 22% sequentially. AIP is driving both new customer conversions and existing customer expansions in the U.S. In the first quarter, we booked $286 million of U.S. commercial TCV, representing 131% growth year-over-year. Total remaining deal value in our U.S. commercial business grew 74% year-over-year and 14% sequentially. Our U.S. commercial customer count grew to 262 customers, reflecting 69% growth year-over-year and 19% growth sequentially. We generated $149 million in international commercial revenue in the first quarter, representing 16% growth year-over-year but a 3% sequential decline as a result of continued headwinds in Europe and the revenue catch-up in Q4 that we noted last quarter. We continue to capitalize on targeted growth opportunities in Asia, the Middle East and beyond. Revenue from strategic commercial contracts was $24 million in the quarter. We anticipate second quarter 2024 revenue from these customers to decline to between $7 million and $9 million compared to $19 million in the second quarter of 2023. We continue to anticipate 2024 revenue from these customers to be approximately 2% of full year revenue. Shifting to our Government segment. First quarter government revenue grew 16% year-over-year and 3% sequentially to $335 million. First quarter U.S. government revenue grew 12% year-over-year and 8% sequentially to $257 million. As Ryan noted, we're excited to be the sole prime contractor under the Titan program, and we'll continue pursuing other defense opportunities. We believe we're well positioned to see growth in our U.S. government business over the course of 2024. First quarter international government revenue grew 33% year-over-year and declined 9% sequentially to $79 million as a result of the revenue catch-up in Q4 that we noted last quarter and continued headwinds in Europe. First quarter TCV booked was $904 million, up 128% year-over-year. Net dollar retention was 111%, an increase of 300 basis points from last quarter. The increase was driven both by expansions at existing customers and new customers acquired in Q1 of last year. As net dollar retention does not include revenue from new customers that are acquired in the past 12 months, it does not yet fully capture the acceleration of velocity in our U.S. commercial business over the past year. We ended the first quarter with $4.1 billion in total remaining deal value, an increase of 22% year-over-year and 6% sequentially and $1.3 billion in remaining performance obligations, an increase of 39% year-over-year and 5% sequentially. As a reminder, RPO is primarily comprised of our commercial business, as it does not take into account contracts with an initial term of less than 12 months and contractual obligations that fall beyond termination for convenience clauses, both of which are common in most of our government business. Turning to margin and expense. Adjusted gross margin, which excludes stock-based compensation expense, was 83% for the quarter. Adjusted income from operations, which excludes stock-based compensation expense and related employer payroll taxes was $226 million, representing an adjusted operating margin of 36% and marking the sixth consecutive quarter of expanding adjusted operating margins. Q1 adjusted expense was $408 million, up 2% sequentially and 2% year-over-year. Turning to the balance of the year. Given our conviction in the U.S. business, coupled with our margin expansion, we intend to boost investment in resources in the U.S., including in AIP and specific defense opportunities. While we expect expenses to ramp starting in Q2 through the back half of the year, we remain focused on calibrating expense growth below revenue growth for the full year in order to continue delivering on our goal of sustained GAAP profitability and GAAP operating income. In the first quarter, we generated GAAP operating income of $81 million, representing a 13% margin, our fifth consecutive quarter of GAAP operating income and fourth consecutive quarter of expanding GAAP operating margins. We generated first quarter GAAP net income of $106 million, representing a 17% margin, our sixth consecutive quarter of GAAP profitability. First quarter adjusted earnings per share was $0.08 and GAAP earnings per share was $0.04. Additionally, our combined revenue growth and adjusted operating margin accelerated to 57% in the first quarter, a 3-point increase to our Rule of 40 Score from the prior quarter. We will continue to strive to maintain this exceptional balance of top and bottom line performance. Turning to our cash flow. In the first quarter, we generated $130 million in cash from operations and $149 million in adjusted free cash flow, representing a margin of 20% and 23%, respectively. In Q1, we also repurchased approximately 0.5 million shares as part of our share repurchase program. As of the end of the quarter, we have approximately $990 million remaining of the original authorization. We ended the quarter with $3.9 billion in cash, cash equivalents and short-term U.S. treasury securities. We retain access to additional liquidity of up to $500 million through our revolving credit facility, which remains entirely undrawn. Now turning to our outlook. For Q2 2024, we expect revenue of between $649 million and $653 million and adjusted income from operations of between $209 million and $213 million. For full year 2024, we are raising our revenue guidance to between $2.677 billion and $2.689 billion. We are raising our U.S. commercial revenue guidance to an excess of $661 million, representing a growth rate of at least 45%. We are raising our adjusted income from operations guidance to between $868 million and $880 million. We continue to expect adjusted free cash flow of between $800 million and $1 billion, and we continue to expect GAAP operating income and net income in each quarter of this year.

Alexander Karp, Chief Executive Officer

Welcome to our Q1 earnings. I believe we performed exceptionally well in the U.S. Our metrics reflect this success; our Rule of 40 stands at 57, and we’ve achieved 68% growth in U.S. commercial, following a growth of 70% last quarter when adjusted for SPAC revenue. Deal growth in the U.S. has increased from 70 to 136 over the past year. There's significant enthusiasm around our products, particularly in commercial and government sectors, which are beginning to see an uptick. Customer growth in U.S. commercial has risen by 69%. We are achieving these results while maintaining a Rule of 40 Score of 57, which indicates we are performing exceptionally well. We are expanding the company while also investing in our core software development. Our success in the U.S. raises the question of why we've seen such positive outcomes. The primary reason is our software infrastructure, which enables enterprises, both commercial and government, to advance beyond basic applications to generate real value. Whether it involves managing satellite tasks in a commercial setting or enhancing productivity through our software platform and large language models, we believe we are unique in the market, enabling practical applications of these technologies. This is driving our remarkable 68% growth in U.S. commercial with a nascent sales force backed by a decade of intellectual property that anticipated large language models. The same applies to our government initiatives; our operational reach in places like Ukraine, Israel, and within the U.S. government is impressive. In conflicts involving Western allies, Palantir is often the first choice. Our capacity to maintain this momentum is strengthened by our previous investments, cultural unity, and the depth of our leadership experience. It may perplex some, including analysts, how this is succeeding, but it is. We are now in our sixth consecutive quarter of profitability, which is a noteworthy achievement given past doubts about our ability to turn a profit or penetrate the commercial market. Additionally, our revenue per person has grown approximately 26% year-on-year. However, we are facing challenges in Europe, which makes up 16% of our business, as the region is trending towards 0% GDP growth over the coming years. While this poses a problem, we are pleased to see U.S. commercial revenue surpass European commercial. Overall, I believe this is a pivotal moment for Palantir.

Ana Soro, Finance Team

Thanks, Alex. We'll now turn to questions. We received a few questions from our shareholders about AI and competitiveness. Matthew and Ryan asked, how does your AI strategy differ from your competitors?

Shyam Sankar, Chief Technology Officer

Well, we're executing our strategy at an unrelenting pace here. If you go back to the launch of AIP, I discussed how we thought the models were going to commoditize and that's really borne out. We see that underscored with LAMMA-370B being released now. But the real opportunity for us, as Alex made mention of, is that people are using LLMs incorrectly in the enterprise. And as far as I can tell, we're really the only company to figure out how to help our customers get beyond chat, leveraging the investments that we've made in ontology, really harnessing this pattern of implementation where you're taking unstructured inputs and turning them into structured actions and outputs that drive economic value in the enterprise. Now there's this thing that some companies have started saying where only 10% of my customers have data that's even AI-ready to begin with. I think that's completely wrong. Maybe they don't have something to sell in the present moment so they're trying to sell in the past. But if that was right, how is it that in a single-day boot camp, we're able to add value on top of our customers' messy existing data? Ultimately, it’s software that works. And to the present moment, I'm focused on helping enable builders in the context of the enterprise. I made mention of the DoD Hackathon, where a single user built in AIP logic function, surface and GAIA assist that took a targeting process down from 6 hours to 10 seconds. More generally, in commercial, with Build with AIP, we are releasing a slew of tutorials, quick starts and reference implementations that are going to help turn every customer, every user into a builder to unlock the potential of what they can harness on top of AIP. And that's the way ahead, and that's why we're still ahead.

Alexander Karp, Chief Executive Officer

I don't believe we have competitors in the U.S. commercial market or the U.S. government market. I don't think that's why Ukraine and Israel purchased our product. We stand out because to truly make AI effective, you need an ontology, which no one else has. Many people are claiming the data isn't ready, but that's because they lack Foundry. If you have Foundry and the ontology, the data is ready. With Foundry or Ontology and Apollo, you can operate at the edge; without them, you cannot. Outside of America, we still need to persuade people of this. Domestically, we aren't successfully convincing people that our solution is the only viable one, which results in minimal investment in our approach. Securing investment beyond America would be challenging due to the ecosystem, which primarily exists in the U.S. Efforts would need to be concentrated in Silicon Valley, but it’s currently focused on misguided priorities.

Ana Soro, Finance Team

Our next question is from Dan with Wedbush.

Shyam Sankar, Chief Technology Officer

So good, great quarter. My question is, can you just talk about what conversion looks like from boot camps? And maybe just double-click on a typical customer, now that you have more and more data points, what's that showing you about conversion from a boot camp to actually signing a deal?

Ryan Taylor, Chief Revenue Officer & Chief Legal Officer

Yes, I can address that. We introduced boot camps two quarters ago as part of our go-to-market strategy, and we’re seeing positive results from this initiative. In just 1 to 5 days, the boot camp allows us to accomplish what previously took 3 months. We're witnessing customers signing 7-figure deals shortly after attending the boot camp, and we can demonstrate what they can do on the platform using real data much faster, leading to monetization discussions happening sooner. This is reflected in our results, with a 69% growth in customers in the U.S. commercial sector. We closed 136 deals in Q1 this year, compared to 70 deals in Q1 of last year in the U.S. commercial sector, representing a 94% year-over-year increase. It's still early in the process, but the results from the boot camps indicate that they are effective in driving monetization.

Alexander Karp, Chief Executive Officer

The boot camps provide a significant advantage as they establish a standard that other companies will find challenging to replicate. Even if potential customers do not purchase our product, they are nonetheless exposed to the possibilities we offer. This exposure means that when they attempt their own solutions and encounter failures, they will remember what we've demonstrated. Consequently, they may choose to buy from Palantir later. The boot camp initiative is still in its early stages, and I wouldn't claim we've fully mastered the sales process yet. Our growth statistics, whether 68%, 94% growth in deals, or 69% in customer increases, indicate we are just beginning to understand how to get customers to invest in our product. We excel at demonstrating what is achievable, and a portion of those educated customers eventually purchase. As we improve in this area, we expect our numbers to grow. However, it's important to note that we are far from perfect in our sales approach. When we developed our anti-terror platform, a key aspect was educating potential users on balancing effective counter-terrorism with civil liberties. Most prospects did not purchase in the first year, but by the fifth year, they recognized the value of our integration capabilities, legal compliance, and security measures. Even if some consider developing similar solutions themselves, they often find it unfeasible. The crucial metric here goes beyond quarterly closures; it involves setting a market standard. If others believe they can surpass it, they may attempt to build their own solutions, but for those who can't, we remain available. This strategy has proven highly effective, and nearly every country that had the opportunity to acquire our core anti-terror product eventually did so.

Ana Soro, Finance Team

Our next question is from Mariana with Bank of America.

Mariana Perez Mora, Analyst

It relates to implementation, focusing less on the customer aspect. I believe the demand we're witnessing is evident from both the government and commercial sectors. I'm particularly interested in understanding what steps will be taken next to address this demand and expand support for a larger customer base. What plans do you have for hiring and partnerships? What are the upcoming priorities, and what challenges do you anticipate?

Shyam Sankar, Chief Technology Officer

Well, I can definitely address that. Ryan may have some insights regarding the partnership aspect and the growth of that ecosystem. From a product perspective, I’m particularly excited about Build with AIP and the boot camps we're conducting after finalizing deals with customers. We are really starting a movement among customers to unleash their builders and address various use cases. There has been a notable shift; while we continue to tackle our customers' most challenging problems and critical use cases to deliver significant value quickly, we are also focused on empowering every one of their builders to get started. In the past couple of quarters, we've been able to go in, help them solve one issue, and subsequently spark hundreds of use cases they can independently manage. We are leveraging repeatable reference implementations, reference architectures, quick starts, and tutorials to facilitate this across different industries and functions, including government.

Ryan Taylor, Chief Revenue Officer & Chief Legal Officer

Regarding our partnerships, we recently announced one with Oracle. Hyperscalers are beginning to understand that to enhance computing power, they need to move beyond just chat. A more comprehensive solution is necessary for their AI strategies, and we are observing this shift. Furthermore, we are broadening our partnerships throughout the industry, with partners implementing solutions for our customers.

Alexander Karp, Chief Executive Officer

We are currently engaged in ongoing discussions with well-known hyperscalers, emphasizing that we offer the perfect product while they provide the ideal distribution. They can build upon our product and achieve better margins in their distribution. We are having these discussions in Japan alongside efforts to support defense tech start-ups, which are progressing well. This also allows us to expand our core architecture and software development into the Department of Defense while reducing competition among players who may otherwise rival us. Building partnerships with these organizations speeds up our revenue generation. In the U.S. communications sector, we are facilitating our customers in a way similar to how we operated in the past by supplying Palantir software engineers. There simply aren't enough of them, which limits our scalability. We need to encourage and create a platform for our customers to do this themselves. We observe that both AIP and Foundry are being used effectively by customers independently, contributing to a 26% increase in revenue per person compared to last year because we are generating more income with a similar workforce. This is a direct result of our strategic initiatives, which provide us with significant advantages in both alignment and revenue quality. This explains our strong performance with the Rule of 40 and the growth in revenue per individual, which allows us to succeed despite imperfect sales tactics. We are continuously exploring ways to enhance this process.

Ana Soro, Finance Team

Thank you. Turning back to a question from our shareholders. A lot of people have noticed that Palantir is pretty outspoken when it comes to geopolitics. How has this been received?

Alexander Karp, Chief Executive Officer

It's a complex issue because there have been differing opinions within our team, some to the extent of leaving over disagreements, and this has been ongoing for two decades. Our commitment to special forces, the U.S. Army, our involvement with Maven, and our collaboration with Homeland Security have all sparked discussions about our partnerships with various countries. More recently, our support for Ukraine wasn't as controversial, whereas selling software to Israel attracted more debate. I believe the central risk to Palantir, the U.S., and the world lies in a regressive mindset that undermines our institutions, often labeled as woke, but resembling a superficial belief system. This poses a genuine threat to society and to Palantir if we avoid addressing these issues. Our exceptional product offering stems from our strong alignment on what it means to build software and a shared belief in the superiority of the Western way of life. The dedicated people at this company have been in the industry for over a decade, and their commitment is driven by a desire to create a stronger, more equitable, and prosperous society through better products for our allies, U.S. industry, and government. Even if some customers disagree with my views, they respect our honesty and our commitment to our principles. This is why we advocate for our culture and products, leading to the growth we've seen. This growth—with impressive numbers like 68% in U.S. revenue and nearly doubling our customer count—results from having complete alignment and superior products. We’re not interested in selling subpar products that are hard to sell; instead, we focus on delivering real value. That's how we conduct business at Palantir. Lastly, the reason we have some of the best investors, especially individual ones, is that they understand the challenges we've faced and continue to support us. They remain steadfast despite criticism and misconceptions about our viability and profitability. Those on the front lines defending against misinformation do so because they believe we are fighting for them, and that belief is what drives our success as a company.

Ana Soro, Finance Team

Thank you.