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Palantir Reports 49% Revenue Growth; US Commercial Revenue Up 90% Y/Y

Palantir Technologies Inc. (NYSE:PLTR) today announced financial results for the second quarter ended June 30, 2021.

Q2 2021 Highlights

  • Total revenue grew 49% year-over-year to $376 million
  • US commercial revenue grew 90% year-over-year
  • Closed 62 deals of $1 million or more, of which:
    • 30 deals are $5 million or more
    • 21 deals are $10 million or more
  • 20 net new customers added in Q2 2021, total customers up 13% quarter-over-quarter
  • Commercial customer count increased 32% quarter-over-quarter
  • Cash flow from operations of $23 million, representing a 6% margin
  • Adjusted free cash flow of $50 million, representing a 13% margin
  • GAAP net loss per share, diluted of ($0.07)
  • Adjusted earnings per share, diluted of $0.04

H1 2021 Highlights

  • Total revenue grew 49% year-over-year to $717 million
  • Commercial customer count increased 61% since December 31, 2020
  • Cash flow from operations of $140 million, representing a 19% margin
  • Adjusted free cash flow of $201 million, representing a 28% margin

Q2 2021 Financial Summary

(in thousands, except percentages and per share amounts)

Second Quarter 2021

 

Amount

Revenue

$

375,642

 

 

 

Year-over-year growth

49

%

 

 

 

 

 

 

 

Amount

 

Margin

Loss from Operations

$

(146,148

)

 

(39

)%

Adjusted Income from Operations

$

116,727

 

 

31

%

Cash Flow from Operations

$

22,750

 

 

6

%

Adjusted Free Cash Flow

$

49,823

 

 

13

%

Net Loss

$

(138,580

)

 

 

Adjusted Net Income

$

97,955

 

 

 

Adjusted EBITDA

$

121,489

 

 

32

%

GAAP Net Loss Per Share, Diluted

$

(0.07

)

 

 

Adjusted Earnings Per Share, Diluted

$

0.04

 

 

 

Outlook

For Q3 2021, we expect:

  • $385 million in revenue.
  • Adjusted operating margin of 22%.

For full year 2021, we are raising our outlook for:

  • Adjusted free cash flow to in excess of $300 million, up from in excess of $150 million.

Per long-term guidance policy, as provided by our Chief Executive Officer, Alex Karp, we continue to expect:

  • Annual revenue growth of 30% or greater for 2021 through 2025.

Earnings Webcast

A public webcast will be held at 6:00 a.m. MT / 8:00 a.m. ET today to discuss the results for our second quarter ended June 30, 2021 and financial outlook. The live public call can be accessed by registering online at https://event.on24.com/wcc/r/3196394/BE6143CF063C810BC19CA8A0CA2E396E. A replay of the webcast will be available at https://investors.palantir.com following the event.

A slide presentation including supplemental financial information and reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures will be available through Palantir’s Investor Relations website at https://investors.palantir.com.

Forward-Looking Statements

This press release and statements on our earnings webcast contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook, product development, expected benefits of and applications for our software platforms, business strategy and plans (including strategy and plans relating to our sales force, partnerships, and customers), market trends and market size, opportunities (including growth opportunities), our expectations regarding our recent and potential investments in, and commercial contracts with, various entities, including special purpose acquisition companies and other privately-held or publicly-traded companies, and positioning. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management. Words such as “guidance,” “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “plan,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall,” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to risks detailed in our filings with the Securities and Exchange Commission (the “SEC”), including in our annual report on Form 10-K for the fiscal year ended December 31, 2020 and other filings and reports that we may file from time to time with the SEC, including our quarterly report on Form 10-Q for the quarter ended June 30, 2021. In particular, the following factors, among others, could cause our results to differ materially from those expressed or implied by such forward-looking statements: our ability to successfully execute our business and growth strategy; the sufficiency of our cash and cash equivalents to meet our liquidity needs; the demand for our platforms in general; our ability to increase our number of new customers and revenue generated from customers; our ability to realize some or all of the total contract value of customer contracts as revenue, including any contractual options available to customers or contractual periods that are subject to termination for convenience provisions; our long and unpredictable sales cycle; our ability to successfully grow our direct salesforce and to successfully execute our channel sales and other strategic initiatives with third parties; our ability to retain and expand our customer base; the fluctuation of our results of operations and our key business measures on a quarterly basis in future periods; the seasonality of our business; the implementation process for our platforms, which may be complex and lengthy; our ability to successfully develop and deploy new technologies to address the needs of our customers; our ability to make our platforms easier to install and consume; our ability to maintain and enhance our brand and reputation; news or social media coverage about us, including but not limited to coverage that presents, or relies on, inaccurate, misleading, incomplete, or otherwise damaging information; and any breach or access to customer or third-party data.

The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. Past performance is not necessarily indicative of future results.

Additional Definitions

For the purpose of this press release, the value of deals closed reflects the total contract value and presumes the exercise of all contract options and no termination of contracts; however, the majority of our contracts are subject to termination provisions, including for convenience, and there can be no guarantee that contracts are not terminated or that contract options will be exercised.

Non-GAAP Financial Measures

This press release and the accompanying tables contain the non-GAAP financial measures adjusted income (loss) from operations which excludes stock-based compensation and related employer payroll taxes; adjusted operating margin; adjusted free cash flow; adjusted free cash flow margin; adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”); adjusted net income (loss); and adjusted earnings per share (“EPS”), diluted.

We believe these non-GAAP financial measures help us evaluate our business, identify trends affecting Palantir’s business, formulate business plans and financial projections, and make strategic decisions. We exclude stock-based compensation, which is a non-cash expense, from these non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance and provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team. Additionally, we exclude employer payroll taxes related to stock-based compensation, as it is difficult to predict and outside of Palantir’s control. Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Further, these metrics have certain limitations, as they do not include the impact of certain expenses that are reflected in our consolidated statements of operations. For example, adjusted free cash flow does not reflect our future contractual commitments or the total increase or decrease in our cash balances for a given period. Thus, our non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.

We compensate for these limitations by providing a reconciliation of each of these non-GAAP measures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure.

A reconciliation table of the most comparable GAAP financial measure to each non-GAAP financial measure used in this press release is included at the end of this release. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, reconciling items that may be incurred in the future such as stock-based compensation, and related employer payroll taxes, the effect of which may be significant.

Available Information

Palantir uses its Investor Relations website at https://investors.palantir.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Palantir’s Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, and webcasts.

About Palantir Technologies Inc.

Palantir Technologies Inc. builds and deploys operating systems for the modern enterprise. Additional information is available at https://www.palantir.com.

Palantir Technologies Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Revenue

$

375,642

 

 

$

251,889

 

 

$

716,876

 

 

$

481,216

 

Cost of revenue (1)

90,926

 

 

68,410

 

 

165,037

 

 

132,704

 

Gross profit

284,716

 

 

183,479

 

 

551,839

 

 

348,512

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing (1)

162,379

 

 

102,518

 

 

298,476

 

 

201,171

 

Research and development (1)

110,524

 

 

86,815

 

 

208,995

 

 

152,615

 

General and administrative (1)

157,961

 

 

93,291

 

 

304,530

 

 

164,056

 

Total operating expenses

430,864

 

 

282,624

 

 

812,001

 

 

517,842

 

Loss from operations

(146,148

)

 

(99,145

)

 

(260,162

)

 

(169,330

)

Interest income

372

 

 

551

 

 

748

 

 

3,818

 

Interest expense

(590

)

 

(5,646

)

 

(2,430

)

 

(10,240

)

Change in fair value of warrants

 

 

(3,683

)

 

 

 

10,012

 

Other income (expense), net

2,125

 

 

(1,589

)

 

(2,769

)

 

4,511

 

Loss before provision (benefit) for income taxes

(144,241

)

 

(109,512

)

 

(264,613

)

 

(161,229

)

Provision (benefit) for income taxes

(5,661

)

 

943

 

 

(2,559

)

 

3,500

 

Net loss

$

(138,580

)

 

$

(110,455

)

 

$

(262,054

)

 

$

(164,729

)

Net loss per share attributable to common stockholders, basic

$

(0.07

)

 

$

(0.17

)

 

$

(0.14

)

 

$

(0.27

)

Net loss per share attributable to common stockholders, diluted

$

(0.07

)

 

$

(0.17

)

 

$

(0.14

)

 

$

(0.28

)

Weighted-average shares of common stock outstanding used in computing net loss per share attributable to common stockholders, basic

1,894,606

 

 

640,450

 

 

1,858,085

 

 

616,150

 

Weighted-average shares of common stock outstanding used in computing net loss per share attributable to common stockholders, diluted

1,894,606

 

 

640,669

 

 

1,858,085

 

 

618,635

 

(1) Includes stock-based compensation expense as follows (in thousands):

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Cost of revenue

$

24,029

 

 

$

17,832

 

 

$

40,006

 

 

$

25,900

 

Sales and marketing

72,008

 

 

39,932

 

 

129,294

 

 

58,395

 

Research and development

50,630

 

 

37,897

 

 

88,504

 

 

52,929

 

General and administrative

86,075

 

 

32,187

 

 

168,669

 

 

44,731

 

Total stock-based compensation expense

$

232,742

 

 

$

127,848

 

 

$

426,473

 

 

$

181,955

 

Palantir Technologies Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

June 30,

 

December 31,

 

2021

 

2020

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

2,341,156

 

 

$

2,011,323

 

Restricted cash

36,750

 

 

37,285

 

Accounts receivable

242,998

 

 

156,932

 

Prepaid expenses and other current assets

41,648

 

 

51,889

 

Total current assets

2,662,552

 

 

2,257,429

 

Property and equipment, net

24,824

 

 

29,541

 

Restricted cash, noncurrent

61,914

 

 

79,538

 

Operating lease right-of-use assets

209,243

 

 

217,075

 

Other assets

117,135

 

 

106,921

 

Total assets

$

3,075,668

 

 

$

2,690,504

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

30,914

 

 

$

16,358

 

Accrued liabilities

166,252

 

 

158,546

 

Deferred revenue

194,511

 

 

189,520

 

Customer deposits

257,747

 

 

210,320

 

Operating lease liabilities

33,162

 

 

29,079

 

Total current liabilities

682,586

 

 

603,823

 

Deferred revenue, noncurrent

40,518

 

 

50,525

 

Customer deposits, noncurrent

62,732

 

 

81,513

 

Debt, noncurrent, net

 

 

197,977

 

Operating lease liabilities, noncurrent

216,630

 

 

229,800

 

Other noncurrent liabilities

4,239

 

 

4,316

 

Total liabilities

1,006,705

 

 

1,167,954

 

Stockholders’ equity:

 

 

 

Common stock

1,937

 

 

1,792

 

Additional paid-in capital

7,294,369

 

 

6,488,857

 

Accumulated other comprehensive income (loss)

65

 

 

(2,745

)

Accumulated deficit

(5,227,408

)

 

(4,965,354

)

Total stockholders’ equity

2,068,963

 

 

1,522,550

 

Total liabilities and stockholders’ equity

$

3,075,668

 

 

$

2,690,504

 

Palantir Technologies Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

Six Months Ended June 30,

2021

 

2020

Operating activities

 

 

 

Net loss

$

(262,054

)

 

$

(164,729

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

Depreciation and amortization

7,999

 

 

7,793

 

Stock-based compensation

426,473

 

 

181,955

 

Change in fair value of warrants

 

 

(10,012

)

Non-cash operating lease expense

14,435

 

 

19,831

 

Other operating activities

560

 

 

3,633

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(83,883

)

 

(56,583

)

Prepaid expenses and other current assets

12,770

 

 

(3,220

)

Other assets

(9,522

)

 

(9,937

)

Accounts payable

14,589

 

 

(35,012

)

Accrued liabilities

9,070

 

 

(30,366

)

Deferred revenue, current and noncurrent

(3,679

)

 

19,645

 

Customer deposits, current and noncurrent

28,668

 

 

(124,434

)

Operating lease liabilities, current and noncurrent

(15,795

)

 

(25,815

)

Other noncurrent liabilities

 

 

921

 

Net cash provided by (used in) operating activities

139,631

 

 

(226,330

)

 

 

 

 

Investing activities

 

 

 

Purchases of property and equipment

(1,405

)

 

(5,945

)

Proceeds from the sale of assets held for sale

 

 

250

 

Net cash used in investing activities

(1,405

)

 

(5,695

)

 

 

 

 

Financing activities

 

 

 

Proceeds from the issuance of common stock, net of issuance costs

 

 

542,922

 

Proceeds from issuance of debt, net of issuance costs

 

 

149,683

 

Principal payments on borrowings

(200,000

)

 

(250,000

)

Proceeds from the exercise of common stock options

376,688

 

 

28,824

 

Repurchase of common stock

 

 

(3,777

)

Other financing activities

(1,744

)

 

(377

)

Net cash provided by financing activities

174,944

 

 

467,275

 

Effect of foreign exchange on cash, cash equivalents, and restricted cash

(1,496

)

 

(197

)

Net increase in cash, cash equivalents, and restricted cash

311,674

 

 

235,053

 

Cash, cash equivalents, and restricted cash - beginning of period

2,128,146

 

 

1,401,962

 

Cash, cash equivalents, and restricted cash - end of period

$

2,439,820

 

 

$

1,637,015

 

Palantir Technologies Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands)

(unaudited)

 

Non-GAAP Reconciliations

 

Adjusted Income from Operations and Adjusted Operating Margin (in thousands, except percentages)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Loss from operations

$

(146,148

)

 

$

(99,145

)

 

$

(260,162

)

 

$

(169,330

)

Add: stock-based compensation

232,742

 

 

127,848

 

 

426,473

 

 

181,955

 

Add: employer payroll taxes related to stock-based compensation

30,133

 

 

 

 

66,999

 

 

 

Adjusted income from operations

$

116,727

 

 

$

28,703

 

 

$

233,310

 

 

$

12,625

 

Adjusted operating margin

31

%

 

11

%

 

33

%

 

3

%

Adjusted Free Cash Flow (in thousands, except percentages)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Net cash provided by (used in) operating activities

$

22,750

 

 

$

60,854

 

 

$

139,631

 

 

$

(226,330

)

Less: purchases of property and equipment

(697

)

 

(2,929

)

 

(1,405

)

 

(5,945

)

Add: cash paid for employer payroll taxes related to stock-based compensation

27,770

 

 

 

 

62,572

 

 

 

Adjusted free cash flow

$

49,823

 

 

$

57,925

 

 

$

200,798

 

 

$

(232,275

)

Adjusted free cash flow margin

13

%

 

23

%

 

28

%

 

(48

)%

Adjusted EBITDA (in thousands, except percentages)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Net Loss

$

(138,580

)

 

$

(110,455

)

 

$

(262,054

)

 

$

(164,729

)

Less: interest income

(372

)

 

(551

)

 

(748

)

 

(3,818

)

Add: interest expense

590

 

 

5,646

 

 

2,430

 

 

10,240

 

Less: change in fair value of warrants

 

 

3,683

 

 

 

 

(10,012

)

Add: other (income) expense, net

(2,125

)

 

1,589

 

 

2,769

 

 

(4,511

)

Add: provision (benefit) for income taxes

(5,661

)

 

943

 

 

(2,559

)

 

3,500

 

Add: depreciation and amortization

4,762

 

 

4,122

 

 

7,999

 

 

7,793

 

Add: stock-based compensation

232,742

 

 

127,848

 

 

426,473

 

 

181,955

 

Add: employer payroll taxes related to stock-based compensation

30,133

 

 

 

 

66,999

 

 

 

Adjusted EBITDA

$

121,489

 

 

$

32,825

 

 

$

241,309

 

 

$

20,418

 

Adjusted EBITDA margin

 

32

%

 

 

13

%

 

 

34

%

 

 

4

%

Adjusted Earnings per Share, Diluted (in thousands, except per share amounts)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Net loss attributable to common stockholders

$

(138,580

)

 

$

(110,455

)

 

$

(262,054

)

 

$

(164,729

)

Less: change in fair value attributable to participating securities

 

 

(171

)

 

 

 

(7,479

)

Net loss attributable to common stockholders, diluted

(138,580

)

 

(110,626

)

 

(262,054

)

 

(172,208

)

Add: stock-based compensation

232,742

 

 

127,848

 

 

426,473

 

 

181,955

 

Add: employer payroll taxes related to stock-based compensation

30,133

 

 

 

 

66,999

 

 

 

Less: income tax effect related to adjustments (1)

(26,340

)

 

(4,052

)

 

(50,812

)

 

(4,580

)

Adjusted net income attributable to common stockholders, diluted

$

97,955

 

 

$

13,170

 

 

$

180,606

 

 

$

5,167

 

Weighted-average shares used in computing GAAP net loss per share, diluted

1,894,606

 

 

640,669

 

 

1,858,085

 

 

618,635

 

Adjusted weighted-average shares used in computing adjusted earnings per share, diluted (2)

2,310,731

 

 

920,993

 

 

2,323,271

 

 

927,603

 

Adjusted earnings per share, diluted

$

0.04

 

 

$

0.01

 

 

$

0.08

 

 

$

0.01

 

——————

(1) Income tax effect is based on long-term estimated annual effective tax rates of 22.2% and 22.1% for the periods ended 2021 and 2020, respectively.

(2) Includes an additional 416 million and 465 million dilutive securities for the three and six months ended June 30, 2021, respectively, and an additional 280 million and 309 million dilutive securities for the three and six months ended June 30, 2020, respectively, that are excluded from a GAAP perspective due to the Company’s net loss position.

 

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