Date: 2026-02-23 Quarter: Q4 FY25 (Dec 31, 2025) Market cap: ~320B|EV: 313B | EV/TTM Rev: ~70x | Revenue growth: +70% YoY
Palantir delivered the best quarter in its public history across nearly every measurable dimension: 70% YoY revenue growth (accelerating from 63%, fourth consecutive quarter of acceleration), 84.7% gross margin (ATH), 40.9% GAAP operating margin (ATH), Rule of 40 of 127, and TCV of $4.26B — 3.0x quarterly revenue — pointing to continued acceleration. FY26 guidance of +61% growth at 7.19Bmidpointbeatconsensusby 290M and was issued by management that has beaten every quarter in FY25. The business earns 5/5. The stock at ~70x TTM revenue earns 1/5. Overall conviction: 3/5 — existing holders should hold without question; new positions require accepting extreme valuation risk for a company that is operationally earning it.
| Criterion | Threshold | Actual | Pass? |
|---|---|---|---|
| Revenue YoY growth | >30% (>40% preferred) | 70.0% | PASS |
| Gross margin | >60% (>70% preferred) | 84.7% GAAP | PASS |
| Revenue per quarter | >$50M | $1,407M | PASS |
| Data availability | 4+ quarters | 12+ quarters | PASS |
| Share dilution | <10% annual | ~14% gross SBC / ~5% net (est. after buybacks) | PASS |
| GAAP profitability trajectory | Improving or positive | GAAP op margin 0.8% → 40.9% over 8Q | PASS |
Gate: PASS — all six criteria met.
| Factor | Rating | Detail |
|---|---|---|
| Growth | Strong | 70% YoY — all-time high. Accelerating from 39%/48%/63% in prior three quarters. |
| Trajectory | Accelerating | Q1→Q2→Q3→Q4 FY25: 39% → 48% → 63% → 70% YoY. Sequential adds: $56M → $120M → $177M → $226M. Pure inflection. |
| Margins | High | 84.7% gross (ATH), 40.9% GAAP op (ATH), 56.8% Non-GAAP op (ATH), 56.2% FCF margin. Every line at record. |
| Dominance | Dominant | No direct competitor in AI-powered decision intelligence at scale. AIP bootcamp 70% conversion. Government moat established over 20+ years. |
| Valuation | Rich | ~70x EV/TTM Rev, ~142x EV/TTM FCF. FY26 guide: 43x EV/fwd Rev, 78x EV/fwd FCF. Most expensive large-cap software name in the market. |
| Special | Present | DOGE government efficiency tailwind; AIP commercial flywheel accelerating; FY26 U.S. Commercial guide of +115% is extraordinary. |
| Quarter | Revenue ($M) | YoY % | QoQ % | GAAP GM | GAAP OM | NG OM | GAAP NI ($M) | FCF ($M) | FCF Mgn |
|---|---|---|---|---|---|---|---|---|---|
| Q1_FY23 | 525.2 | +17.7% | +9.9% | 79.5% | 0.8% | 23.8% | 16.8 | 182.6 | 34.8% |
| Q2_FY23 | 533.3 | +12.7% | +1.5% | 80.0% | 1.9% | 25.3% | 28.1 | 96.0 | 18.0% |
| Q3_FY23 | 558.2 | +16.8% | +4.7% | 80.7% | 7.2% | 29.3% | 71.5 | 140.8 | 25.2% |
| Q4_FY23 | 608.4 | +19.6% | +9.0% | 82.1% | 10.8% | 34.4% | 93.4 | 304.8 | 50.1% |
| Q1_FY24 | 634.3 | +20.8% | +4.3% | 81.7% | 12.8% | 35.7% | 105.5 | 126.9 | 20.0% |
| Q2_FY24 | 678.1 | +27.2% | +6.9% | 81.0% | 15.5% | 37.4% | 134.1 | 148.7 | 21.9% |
| Q3_FY24 | 725.5 | +30.0% | +7.0% | 79.8% | 15.6% | 38.0% | 143.5 | 434.5 | 59.9% |
| Q4_FY24 | 827.5 | +36.0% | +14.1% | 78.9% | 1.3%* | 45.0% | 79.0 | 517.4 | 62.5% |
| Q1_FY25 | 883.9 | +39.4% | +6.8% | 80.4% | 19.9% | 44.2% | 214.0 | 304.1 | 34.4% |
| Q2_FY25 | 1,003.7 | +48.0% | +13.6% | 80.8% | 26.8% | 46.3% | 326.7 | 568.8 | 56.7% |
| Q3_FY25 | 1,181.1 | +62.8% | +17.7% | 82.4% | 33.3% | 50.8% | 475.6 | 539.9 | 45.7% |
| Q4_FY25 | 1,406.8 | +70.0% | +19.1% | 84.7% | 40.9% | 56.8% | 609.0 | 791.4 | 56.2% |
Q4_FY24 GAAP op margin collapse to 1.3% (vs Non-GAAP 45%) driven by elevated SBC/one-time items. The FY25 GAAP margin expansion is extraordinary even stripping this distorted base: Q3 FY24 to Q4 FY25 is 15.6% → 40.9% in four quarters.
TTM FY25: Revenue $4,475M | Gross Profit $3,686M (82.3%) | FCF $2,204M (49.2%) | GAAP Net Income $1,626M (36.3%)
At Q3 FY25 earnings (November 2025), Palantir guided Q4 revenue implying approximately $1,329M. The $1,407M actual represents a 5.8% beat.
| Metric | Expected (at Q3 call) | Actual | Verdict |
|---|---|---|---|
| Q4 Revenue | ~$1,329M (implied guide midpoint) | $1,406.8M | Beat +5.8% |
| Q4 Revenue YoY | ~60-62% (continuation/modest accel) | 70.0% | Surprised — fourth consecutive acceleration |
| GAAP Operating Margin | ~30-35% (continuation) | 40.9% | Significant beat — ATH |
| Non-GAAP Operating Margin | ~50-53% | 56.8% | Beat |
| FCF | ~$500-600M | $791.4M (56.2% margin) | Beat +32-58% |
| U.S. Commercial Revenue | ~$420-450M (+100%+ YoY) | $507M (+137% YoY) | Blowout |
| U.S. Government Revenue | ~$510-530M | $570M (+66% YoY) | Beat |
| TCV | ~$2-2.5B (est.) | $4,262M (+138% YoY) | Blowout — 3.0x quarterly revenue |
| FY26 Full-Year Guide | ~$6.5-6.9B (consensus) | $7.182-7.198B | Guide-up significant |
Delta assessment: Two surprises dominate. First: the U.S. Commercial segment at +137% YoY, +28% QoQ, reaching 507Minasinglequarter—nowapproachingparitywithU.S.Government(570M) and on a trajectory to surpass it in Q1 or Q2 FY26. This confirms AIP is experiencing genuine product-market fit hypergrowth, not a deal timing anomaly. Second: TCV of $4.26B is 3.0x quarterly revenue. Contracted future revenue is outpacing recognized revenue at a widening rate — this is the most important signal in the dataset for FY26 execution probability. The FY26 guide of 7.19B(+61290M from management that has beaten every quarter in FY25.
Bullish divergence — sustained and widening.
| Metric | Q4 FY25 | Growth | vs Revenue Growth | Signal |
|---|---|---|---|---|
| Total TCV | $4,262M | +138% YoY | +68pp above revenue | Bullish — contracted rev accelerating faster |
| Total RDV | $4,380M | +145% YoY | +75pp above revenue | Bullish — remaining deal value exploding |
| U.S. Commercial TCV | $1,344M | +67% YoY | — | Strong commercial pipeline |
| Deals ≥$10M | 61 | — | — | Large deal cadence strong |
| Deals ≥$5M | 84 | — | — | Mid-market expanding |
| Deals ≥$1M | 180 | — | — | Broad-based commercial adoption |
| Customer count | +34% YoY | +5% QoQ | — | New logo acquisition healthy |
TCV at $4.26B is 3.0x Q4 quarterly revenue. Historical pattern in FY25: TCV/RDV acceleration has preceded revenue acceleration by 1-3 quarters in every instance. The divergence between TCV growth (138%) and revenue growth (70%) implies FY26 revenue guidance of 61% is beatable, not a stretch target, assuming normal conversion timelines. RDV of $4.38B represents approximately 3+ quarters of U.S. Commercial revenue at current run rate.
NRR gap: Palantir does not disclose net revenue retention. Given U.S. Commercial at +137% YoY and all deal-count tiers accelerating, NRR is almost certainly >130-140% in the U.S. commercial segment. This cannot be confirmed from public data — a persistent opacity concern.
(From pre-computed scuttlebutt stage, 2026-02-23)
Customer sentiment:
Employee sentiment:
Competitive landscape:
Analyst views:
Hiring patterns:
| Metric | Current (TTM FY25) | 1Y Ago (TTM FY24) | FY26 Guide | Assessment |
|---|---|---|---|---|
| Market Cap | ~$320B | ~$80B | — | 4x in 12 months |
| EV | ~$313B | ~$73B | — | Net cash $7.2B |
| TTM Revenue | $4,475M | ~$2,865M | $7,190M mid. | — |
| EV/TTM Revenue | ~70x | ~25x | 43x (EV/FY26) | Extreme. 1Y re-rating was violent. |
| TTM Gross Profit | $3,686M | ~$2,301M | ~$6,100M est. | — |
| EV/TTM GP | ~85x | ~32x | ~51x (EV/FY26 GP) | Extreme |
| TTM FCF | $2,204M | ~$1,227M | $4,025M mid. | ~80% FCF growth YoY |
| EV/TTM FCF | ~142x | ~60x | ~78x (EV/FY26) | Extreme; compresses faster than revenue multiple |
| GAAP Net Income | $1,626M (36.3%) | ~$463M (16.1%) | — | GAAP profitable and inflecting |
Peer context: No true peer exists at this growth rate and margin profile simultaneously. NVDA at comparable growth stages traded at 30-40x TTM revenue. CRM at comparable growth: 15-20x. PLTR commands a significant premium even to high-growth AI comps — the "government moat + AI platform" framing justifies a premium, but 2x the growth-adjusted multiple of peers is extreme.
The math at 70x: To justify current price in 5 years at 30x forward revenue (itself a premium multiple), PLTR needs ~$27B revenue — 6x from today's $4.5B TTM. At 61% FY26, decelerating to 30-40% by FY28-29, that path is arithmetically plausible but requires no major execution miss for 5+ years. Wide outcome distribution. Priced for perfection plus a premium.
The FCF counterargument: At $2.2B TTM FCF growing to 4B + inFY26, theFCFyieldisonly0.7200-230B intrinsic value — below current $313B EV, but not by the 70x revenue multiple implies. The FCF-based valuation is expensive; the revenue-based valuation is stratospheric.
Secular tailwind: AI adoption in enterprise and government decision-making. Palantir is not an AI model company — it is the application layer that makes AI decisions actionable in high-stakes, high-complexity operational environments. This distinction is real and durable. The "last mile" problem of moving AI from lab to production is where most enterprises are stuck; AIP is purpose-built to solve it.
Platform assessment: True platform. Foundry (commercial), Gotham (government), and AIP (AI deployment) form an extensible three-layer stack. The ontology layer — mapping real-world objects, relationships, and decision flows — is the core moat. Competitors can replicate individual AI features; they cannot replicate the ontological data model customers build over time without starting over. This creates extraordinary switching costs and the observed land-and-expand dynamics (8x ACV expansions within months of initial contracts).
DOGE angle: The U.S. Government's efficiency initiative (DOGE) is counterintuitively bullish. Federal agencies need software to analyze expenditures, model resource allocation, and identify waste — precisely what Palantir's government products do. U.S. Government revenue grew 66% YoY to $570M in Q4 FY25. The tailwind appears to already be materializing in numbers, not just narrative.
TAM penetration: U.S. Commercial at 507M/quarter= 2B annualized run rate. Enterprise AI TAM plausibly $50-100B+. Penetration is in low single digits. Similarly early in government worldwide. The TAM argument is legitimate.
International limitation: International revenue was $330.8M in Q4 (23.5% of total). EU data sovereignty concerns, regulatory fragmentation, and defense-adjacent product sensitivity constrain penetration. Growing but significantly lagging domestic. No near-term resolution visible. Long-term TAM is more constrained than the domestic bull case implies if international doesn't inflect.
| Segment | Q4 FY25 | % Total | YoY % | QoQ % |
|---|---|---|---|---|
| U.S. Commercial | $507M | 36.1% | +137% | +28% |
| U.S. Government | $570M | 40.5% | +66% | +17% |
| U.S. Total | $1,076M | 76.6% | +97% | +22% |
| International | $330.8M | 23.5% | est. ~+15% | est. ~+6% |
| Total | $1,406.8M | 100% | +70.0% | +19.1% |
U.S. Commercial at 507MisnowwithinonequarterofovertakingU.S.Government(570M). At the current trajectory differential (+137% vs +66%), U.S. Commercial will be the largest segment by Q2 FY26. This is the narrative shift that re-rates the stock from "defense contractor with a software overlay" to "enterprise AI platform with a government moat."
FY25 full-year segment totals:
| Metric | Low | High | Midpoint | Implied Growth |
|---|---|---|---|---|
| Full-Year Revenue | $7.182B | $7.198B | $7.190B | +61% YoY |
| U.S. Commercial Revenue | >$3.144B | — | — | +115% YoY |
| Adj Operating Income | $4.126B | $4.142B | $4.134B | 57.5% margin |
| Adj FCF | $3.925B | $4.125B | $4.025B | — |
| Q1 FY26 Revenue | $1.532B | $1.536B | $1.534B | +74% YoY |
Assessment: The U.S. Commercial guide of >$3.144B is the number to watch. Achieving it requires sustaining approximately $800M/quarter in U.S. Commercial by Q4 FY26 — up from $507M in Q4 FY25. This is aggressive but supported by TCV of $4.26B (much of it U.S. Commercial) contracted at quarter-end. Management's track record in FY25 (beat every quarter by 3-6%) makes this credible but not certain.
The adj op margin guide of 57.5% is consistent with Q4 FY25's 56.8% — management is guiding to margin maintenance at this level through FY26, implying near-linear operating leverage from revenue growth. If GAAP margins continue expanding toward the adj margin level, the GAAP P/E story improves dramatically.
Valuation fragility. At 70x TTM revenue, any quarter of growth deceleration triggers violent multiple compression. Stock is already down ~27% from early 2026 highs on no fundamental deterioration. Q1 FY26 is guided at $1.534B (+74% YoY) — achievable, but one soft quarter reprices materially.
Government budget and DOGE uncertainty. U.S. Government is 40.5% of revenue. DOGE-driven efficiency could both help (PLTR as the tool) and hurt (reduced federal spending overall). Contract delays, continuing resolutions, or political shifts are real risks. This segment is intrinsically lumpy.
Growth durability at scale. Sustaining 60%+ growth at $7B+ annual revenue would be historically unprecedented for enterprise software. The FY26 guide requires it. History suggests growth rates compress faster than management expects at larger bases.
SBC and dilution. The GAAP/Non-GAAP bridge runs ~$840M annually (approx. $700M SBC + D&A + related). At 14% of TTM revenue, declining as a percentage but still substantial. Net dilution after buybacks is estimated 3-5% annually. This is a real cash cost to shareholders excluded from adj margins.
International stagnation. At 23.5% of revenue and growing far slower than domestic, international limits long-term TAM. EU regulatory environment and geopolitical dynamics constrain the largest non-U.S. markets. If international doesn't inflect in FY26, the total growth story becomes increasingly U.S.-centric and therefore more concentrated.
U.S. Commercial execution vs. guide. >$3.144B FY26 U.S. Commercial is the single most important validation metric. Hit it, and the AIP platform thesis is confirmed at scale. Miss it materially, and the stock re-rates sharply.
DOGE-driven government contracts. Federal efficiency initiatives could drive significant incremental U.S. Government TCV in Q1-Q2 FY26. U.S. Government +66% in Q4 suggests this is already happening. Specific DOGE-related contract announcements would accelerate the narrative.
GAAP profitability inflection. GAAP net margin at 43% in Q4, operating margin at 40.9%. If GAAP margins continue compressing toward adj margin levels (56%+), the company's GAAP P/E normalizes from ~200x toward ~80-100x — still expensive but less extreme, broadening the investor base.
International acceleration signal. Any evidence of product-market fit in European commercial or allied defense would expand the TAM narrative and reduce U.S. concentration. Even modest acceleration from the current ~15% est. YoY would shift sentiment.
FCF compounding. TTM FCF $2.2B → FY26 guide $4.0B → multi-year trajectory toward $6-8B. At that FCF level, even at 20x FCF, the intrinsic value math approaches or exceeds current market cap. Patient capital holding for the FCF story gets compensated if growth sustains.
Atlas does not hold PLTR. Analysis reflects independent assessment.
Sources: PLTR Q4 FY25 earnings press release (SEC EDGAR 8-K, 2026-02-02), Q4 FY25 earnings call transcript (Q4 2025 conference call, 2026-02-02), companies/PLTR.md, stages/quant-prep/PLTR/PLTR_quant_Q4_FY25.md, stages/scuttlebutt/PLTR/2026-02-23.md, stages/transcript-digests/PLTR/PLTR_digest_Q4_FY25.md, earnings/PLTR/_ROLLING.md.