Palantir posted a quarter most companies would frame and hang on the wall.

Palantir posted a quarter most companies would frame and hang on the wall. Q3 revenue came in at $2.313 billion, up 96% year-over-year, ahead of the roughly $2.17-2.18 billion consensus. Adjusted EPS of $0.44 beat too, its 10th straight EPS beat. US commercial revenue hit $984 million, up 148%, and passed US government revenue for the first time. Full-year guidance went up to $8.530-8.534 billion.

The stock still got hit. It opened at $167.90 against Monday's $178.34 close and bottomed at $165.25, down 7.34%. Then it clawed back to close at $175.34, down just 1.68%. Q4 guidance of $2.649-2.653 billion was above consensus, but it implies about 15% sequential growth after roughly 20% in Q3.

The number I keep looking at is total contract value: $2.918 billion, up just 6%. US commercial TCV grew 11%, after 153% in Q2. The CFO said several eight-figure deals were shorter in duration than usual, which shrinks TCV for the same annual value. Stock-based compensation also rose to $318.9 million from $172.3 million a year ago.

At this valuation, beating estimates is the baseline. What investors are really pricing is durability, and 165% net dollar retention plus 55% growth in remaining deal value argue for it. But 96% revenue growth sitting on 6% contract value growth is the question the market tried to price this morning, then mostly shrugged off by the close. Datadog and Snowflake finished higher, so this was a Palantir bookings question, not an AI software selloff.

Sources:
Yahoo Finance: https://finance.yahoo.com/markets/stocks/articles/palantir-falls-6-despite-earnings-134425731.html
Investing.com: https://uk.investing.com/news/stock-market-news/why-is-palantir-technologies-stock-sliding-today-93CH-4951548

Not financial advice. For informational and educational purposes only.