Palantir Technologies, a defense technology company, saw its shares drop by 7% in extended trading on Monday following the release of weaker-than-expected guidance. Despite posting earnings per share of 8 cents, in line with expectations, the company fell short on revenue, reporting $634 million compared to an estimate of $625 million.
The company’s guidance for the upcoming second quarter and full year also failed to meet market expectations. Palantir expects second-quarter revenue to range between $649 million to $653 million, falling short of the $653 million projected by analysts. Additionally, the full-year revenue guidance of $2.68 billion to $2.69 billion is below the $2.71 billion consensus estimate.
Despite the disappointing guidance, Palantir remains optimistic about the future of its U.S. commercial business, citing it as a significant growth driver in the near term. CEO Alex Karp believes that software will continue to transform warfare in the 21st century and expressed confidence in the company’s ability to capitalize on this trend.
Palantir reported net income of $105.5 million for the quarter, marking its sixth consecutive profitable quarter on a GAAP basis. Karp highlighted this achievement as a record profit, emphasizing the company’s financial growth over the years. With revenue increasing by 21% year-over-year to $634 million, Palantir’s profitability remains a strong point.
Despite the weaker-than-expected guidance, Palantir has had notable success in marketing its artificial intelligence products to both government and private sector clients. The company recently secured a $178 million contract with the U.S. Army for the development of a next-generation sensor station. Additionally, Palantir’s “bootcamps” have allowed prospective clients to experience the technology firsthand, with over 660 bootcamps conducted in the first quarter.
While Palantir’s financial performance fell short of market expectations, the company’s continued profitability and success in securing partnerships showcase its potential for long-term growth. By capitalizing on the increasing demand for data and artificial intelligence solutions, Palantir remains well-positioned to navigate the evolving landscape of defense technology and software development.