Palantir Reports Revenue Growth of 47% for Full Year 2020, Expects Q1 2021 Revenue Growth of 45%

DENVER–(BUSINESS WIRE)–Palantir Technologies Inc. (NYSE: PLTR):

Summary

  • $1.1 billion in revenue for full year 2020, up 47% year-over-year
  • $322 million in revenue for Q4 2020, up 40% year-over-year
  • New contracts in Q4 2020 include Rio Tinto, PG&E, bp, U.S. Army, U.S. Air Force, FDA, and NHS
  • Expects Q1 2021 revenue growth of 45% year-over-year

Full Year 2020 Financial Results

In 2020, we generated $1.1 billion in revenue, up 47% year-over-year.

Our average revenue per customer was $7.9 million, up 41% year-over-year. Our average revenue from our top 20 customers was $33.2 million, up 34% year-over-year.

The number of customers generating more than $1 million in annual revenue grew 32% year-over-year. The number of customers generating more than $5 million in annual revenue grew 54% year-over-year. The number of customers generating more than $10 million in annual revenue grew 50% year-over-year.

Q4 2020 Financial Results

In Q4 2020, we generated $322 million in revenue, up 40% year-over-year.

We incurred a loss from operations of $156.6 million, which includes $241.8 million in stock-based compensation and $18.9 million in related employer payroll taxes.

Our income from operations was $104.1 million, after adjusting for stock-based compensation and related employer payroll taxes.

In Q4 2020, we signed 21 contracts each worth $5 million or more in total contract value, including 12 contracts each worth $10 million or more in total contract value.

Outlook

For full year 2021, we continue to expect:

  • Year-over-year revenue growth of greater than 30%.

For Q1 2021, we expect:

  • Year-over-year revenue growth of 45%.
  • Adjusted operating margin of 23%.

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 fourth quarter and fiscal year ended December 31, 2020 and financial outlook. The live public call can be accessed by registering online at https://event.on24.com/wcc/r/2947836/5C123DA27C8C4F9CBFBC27AC3FEABE81. Following the call, a replay will be available at (888) 869-1189 or (706) 643-5902 until midnight (ET) on February 23, 2021.

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.

Non-GAAP Financial Measures

This press release and the accompanying tables contain the non-GAAP financial measures income (loss) from operations excluding stock-based compensation, related employer payroll taxes, and non-recurring direct listing charges (also referred to as “adjusted income (loss) from operations”) and adjusted operating margin.

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 expenses primarily related to the direct listing, as they are a one-time nonrecurring charge, and 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. 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.

Additional Definitions

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

Forward-Looking Statements

This press release contains “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 and partnerships), market trends and market size, opportunities (including growth opportunities), 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 quarterly report on Form 10-Q for the quarter ended September 30, 2020 and other filings and reports that we may file from time to time with the SEC, including our annual report on Form 10-K for the fiscal year ended December 31, 2020. In particular, the following factors, among others, could cause 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 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 complexity and lengthy implementation process for our platforms; 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.

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 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 share and per share amounts)

(unaudited)

 

 

Three Months Ended December 31,

Years Ended December 31,

 

2020

 

2019

2020

2019

Revenue

$

322,091

 

 

$

229,358

 

$

1,092,673

 

$

742,555

 

Cost of revenue(1)

70,503

 

 

75,902

 

352,547

 

242,373

 

Gross profit

251,588

 

 

153,456

 

740,126

 

500,182

 

Operating expenses:

 

 

 

 

 

Sales and marketing(1)

147,619

 

 

112,865

 

683,701

 

450,120

 

Research and development(1)

94,130

 

 

75,835

 

560,660

 

305,563

 

General and administrative(1)

166,411

 

 

112,207

 

669,444

 

320,943

 

Total operating expenses

408,160

 

 

300,907

 

1,913,805

 

1,076,626

 

Loss from operations

(156,572

)

 

(147,451

)

(1,173,679

)

(576,444

)

Interest income

368

 

 

2,137

 

4,680

 

15,090

 

Interest expense

(1,814

)

 

(2,666

)

(14,139

)

(3,061

)

Change in fair value of warrants

 

 

(2,746

)

811

 

(3

)

Other income (expense), net

2,082

 

 

(4,711

)

3,300

 

(2,853

)

Loss before provision (benefit) for income taxes

(155,936

)

 

(155,437

)

(1,179,027

)

(567,271

)

Provision (benefit) for income taxes

(7,593

)

 

3,890

 

(12,636

)

12,375

 

Net loss

$

(148,343

)

 

$

(159,327

)

$

(1,166,391

)

$

(579,646

)

Net loss per share attributable to common stockholders, basic

$

(0.08

)

 

$

(0.29

)

$

(1.19

)

$

(1.02

)

Net loss per share attributable to common stockholders, diluted

$

(0.08

)

 

$

(0.29

)

$

(1.20

)

$

(1.02

)

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

1,763,513,922

 

 

584,722,735

 

977,721,736

 

576,958,560

 

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

1,763,513,922

 

 

584,722,735

 

979,330,067

 

576,958,560

 

 

——————

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

 

 

Three Months Ended December 31,

 

Years Ended December 31,

 

2020

 

2019

 

2020

 

2019

Cost of revenue

$

19,342

 

 

$

11,384

 

 

$

139,627

 

 

$

27,904

 

Sales and marketing

 

75,852

 

 

 

22,973

 

 

 

398,205

 

 

 

79,215

 

Research and development

 

47,365

 

 

 

18,796

 

 

 

357,063

 

 

 

67,933

 

General and administrative

 

99,229

 

 

 

24,167

 

 

 

375,807

 

 

 

66,918

 

Total stock-based compensation expense

$

241,788

$

77,320

$

1,270,702

$

241,970

Palantir Technologies Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

As of December 31,

 

2020

 

2019

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

2,011,323

 

 

$

1,079,154

 

Restricted cash

37,285

 

 

52,099

 

Accounts receivable

156,932

 

 

50,315

 

Prepaid expenses and other current assets

51,889

 

 

32,585

 

Total current assets

2,257,429

 

 

1,214,153

 

Property and equipment, net

29,541

 

 

31,589

 

Restricted cash, noncurrent

79,538

 

 

270,709

 

Operating lease right-of-use assets

217,075

 

 

 

Other assets

106,921

 

 

77,574

 

Total assets

$

2,690,504

 

 

$

1,594,025

 

Liabilities, Redeemable Convertible and Convertible Preferred Stock, and Stockholders’ Equity (Deficit)

Current liabilities:

 

 

 

Accounts payable

$

16,358

 

 

$

51,735

 

Accrued liabilities

158,546

 

 

126,620

 

Deferred revenue

189,520

 

 

186,105

 

Customer deposits

210,320

 

 

364,138

 

Operating lease liabilities

29,079

 

 

 

Total current liabilities

603,823

 

 

728,598

 

Deferred revenue, noncurrent

50,525

 

 

77,030

 

Customer deposits, noncurrent

81,513

 

 

167,538

 

Debt, noncurrent, net

197,977

 

 

396,065

 

Operating lease liabilities, noncurrent

229,800

 

 

 

Other noncurrent liabilities

4,316

 

 

78,205

 

Total liabilities

1,167,954

 

 

1,447,436

 

 

 

 

 

Redeemable convertible preferred stock

 

 

33,569

 

Convertible preferred stock

 

 

2,093,662

 

Stockholders’ equity (deficit):

 

 

 

Common stock

1,792

 

 

588

 

Additional paid-in capital

6,488,857

 

 

1,857,331

 

Treasury stock

 

 

(38,895)

 

Accumulated other comprehensive loss

(2,745)

 

 

(703)

 

Accumulated deficit

(4,965,354)

 

 

(3,798,963)

 

Total stockholders’ equity (deficit)

1,522,550

 

 

(1,980,642)

 

Total liabilities, redeemable convertible and convertible preferred stock, and stockholders’ equity (deficit)

$

2,690,504

 

 

$

1,594,025

 

Palantir Technologies Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

Years Ended December 31,

2020

 

2019

Operating activities

 

 

 

Net loss

$

(1,166,391

)

 

$

(579,646

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Depreciation and amortization

13,871

 

 

12,255

 

Stock-based compensation

1,270,702

 

 

241,970

 

Change in fair value of warrants

(811

)

 

3

 

Impairment of assets

674

 

 

23,407

 

Non-cash operating lease expense

35,049

 

 

 

Other operating activities

4,417

 

 

2,769

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(108,476

)

 

(23,905

)

Prepaid expenses and other current assets

(18,565

)

 

18,806

 

Other assets

(28,990

)

 

(29,447

)

Accounts payable

(34,681

)

 

23,424

 

Accrued liabilities

38,505

 

 

3,733

 

Deferred revenue, current and noncurrent

(30,905

)

 

(134,396

)

Customer deposits, current and noncurrent

(230,873

)

 

279,226

 

Operating lease liabilities, current and noncurrent

(43,639

)

 

 

Deferred rent

 

 

(3,414

)

Other noncurrent liabilities

3,505

 

 

 

Net cash used in operating activities

(296,608

)

 

(165,215

)

Investing activities

 

 

 

Purchases of property and equipment

(12,236

)

 

(13,096

)

Proceeds from the sale of assets held for sale

250

 

 

 

Purchase of equity method investment

(2,934

)

 

(25,868

)

Return of capital from equity method investment

 

 

17,000

 

Net cash used in investing activities

(14,920

)

 

(21,964

)

Financing activities

 

 

 

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

942,529

 

 

100,000

 

Proceeds from issuance of debt, net of issuance costs

199,369

 

 

544,413

 

Principal payments on borrowings

(400,000

)

 

(150,000

)

Proceeds from the exercise of common stock options

298,829

 

 

16,897

 

Repurchase of common stock

(3,777

)

 

(11,202

)

Proceeds from the sale of redeemable convertible preferred stock

 

 

7,500

 

Redemption of redeemable convertible preferred stock

 

 

(168,000

)

Repurchase of convertible preferred stock

 

 

(13,873

)

Other financing activities

(497

)

 

(1,202

)

Net cash provided by financing activities

1,036,453

 

 

324,533

 

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

1,259

 

 

(2,227

)

Net increase in cash, cash equivalents, and restricted cash

726,184

 

 

135,127

 

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

1,401,962

 

 

1,266,835

 

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

$

2,128,146

 

 

$

1,401,962

 

Palantir Technologies Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except percentages)

(unaudited)

Non-GAAP Reconciliation

 

Income (Loss) from Operations, Excluding Stock-Based Compensation, Related Employer Payroll Taxes, and Non-Recurring Direct Listing Charges (“Adjusted Income (Loss) from Operations”)

 

Three Months Ended

December 31,

 

Twelve Months Ended

December 31,

 

2020

 

2019

 

2020

 

2019

Loss from operations

$

(156,572

)

 

$

(147,451

)

 

$

(1,173,679

)

 

$

(576,444

)

Add: stock-based compensation

241,788

 

 

77,320

 

 

1,270,702

 

 

241,970

 

Add: employer payroll taxes related to stock-based compensation (1)

18,933

 

 

 

 

39,105

 

 

 

Add: non-recurring direct listing charges (1)

 

 

 

 

53,737

 

 

 

Income (loss) from operations, excluding stock-based compensation, related employer payroll taxes, and non-recurring direct listing charges

$

104,149

 

 

$

(70,131

)

 

$

189,865

 

 

$

(334,474

)

Adjusted operating margin

32

%

 

(31

)%

 

17

%

 

(45

)%

——————

(1) Related employer payroll taxes and non-recurring direct listing charges were immaterial and as such were excluded in periods prior to and after Q3 2020.

 

Contacts

Investor Relations
Rodney Nelson

investors@palantir.com

Media
Lisa Gordon

media@palantir.com

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