Palantir Technologies reported first-quarter 2026 revenue of $1.12 billion on Thursday, a 39% year-over-year increase that beat analyst consensus estimates of $1.07 billion by $48 million. Adjusted earnings per share came in at $0.18, above the $0.15 forecast, sending shares up 11% in after-hours trading.
Government Contracts Lead the Charge
The U.S. government segment generated $479 million in revenue, up 45% year-over-year, driven by 31 new contract awards across the Department of Defense, the Department of Homeland Security, and intelligence community agencies. The company’s Maven Smart System — its battlefield AI platform deployed by the U.S. Army — extended its scope with a $178 million task order for real-time logistics optimization and predictive maintenance across forward operating bases.
Palantir also disclosed that its AI-powered Gotham platform is now active in 14 NATO member states for joint threat analysis and cross-border data sharing, up from nine at the end of 2025. NATO’s collective AI budget is projected to reach $4.2 billion by 2028, according to the alliance’s Digital Transformation Office.
“The demand signal from government customers has never been stronger,” said CEO Alex Karp in the earnings call. “Every defense ministry we talk to wants sovereign AI capability — not a cloud vendor’s SaaS, but something they own and control.”
AIP Enterprise Momentum Accelerates
On the commercial side, Palantir’s Artificial Intelligence Platform (AIP) now counts 612 enterprise customers, up from 498 in Q4 2025. The platform — which lets organizations deploy large language models on top of their operational data without exposing that data to third-party model providers — is gaining traction in manufacturing, healthcare, and financial services.
AIP boot camp sessions, Palantir’s rapid-deployment sales mechanism introduced in 2024, have now converted 34% of pilot customers into multi-year contract holders, up from 21% a year ago. Average contract value for AIP enterprise deals reached $3.4 million annually, compared to $2.1 million in Q1 2025.
Notable new AIP customers announced this quarter include a major European auto manufacturer deploying predictive supply chain intelligence across 47 assembly plants, and a U.S. regional bank using AIP to run compliance anomaly detection on 200 million daily transactions.
Margin Expansion and 2026 Guidance
Adjusted operating margin reached 38% in Q1, up from 31% a year ago, as revenue growth outpaced headcount expansion. Palantir ended the quarter with 3,912 full-time employees, adding 180 net new hires — a deliberately measured pace the company says is a feature, not a constraint.
For full-year 2026, management raised guidance to $4.6–$4.7 billion in revenue, up from the prior $4.3–$4.4 billion range. The revised outlook implies a 35% growth rate for the year, with U.S. government and AIP commercial cited as the primary drivers.
The stock has gained 87% year-to-date in 2026, closing at $94.20 before the earnings release. With a market capitalization approaching $210 billion, Palantir now trades at approximately 46x forward revenue — a valuation that reflects both its unique government franchise and the scarcity of profitable, defense-grade AI infrastructure companies at scale.
Analysts at Morgan Stanley raised their price target from $85 to $112 following the report, citing AIP’s boot camp conversion rate as the clearest forward indicator of durable enterprise revenue. The next earnings report is scheduled for late July.
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