Earnings Results: Palantir stock skids as exec says downbeat forecast is ‘all the more disappointing’ given opportunities ahead

Executives at Palantir Technologies Inc. offered a lower-than-expected revenue forecast Monday as they predicted that the timing of some large government contracts will be pushed out.


executives now anticipate $474 million to $475 million in third-quarter revenue, along with $1.900 billion to $1.902 billion in full-year revenue. Analysts tracked by FactSet were looking for $500 million and $1.957 billion, respectively. The latest outlook doesn’t bake in any new major government contracts.

The stock was off 13% in midday trading Monday and on track to log a double-digital post-earnings slide for the third consecutive quarter.

“The pipeline around the government business continues to be really robust, both domestically and internationally, but we also have more certainty around what is obviously a frustrating contracting experience,” Chief Operating Officer Shyam Sankar said on the earnings call.

Government deals “at the billion-dollar range of the contracts that we are working on…have the bug of them taking too long and the feature of, in a highly difficult, tumultuous and politically uncertain world, that you actually get paid and you actually make free-cash flow,” Chief Executive Alex Karp said on the earnings call.

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Chief Business Affairs Officer Ryan Taylor added that the software company’s new outlook for the near term is “all the more disappointing” given the “enormous” long-term opportunities he sees ahead of the company.

“As organizations around the world face more pressure and experience more pain, there will be a slowdown in the rate of spending and lengthening of sales cycles, but it will also reveal gaps in enterprises operations, gaps our software can solve,” he said.

Taylor noted that “in the short term,” the dynamic translates to “less revenue now,” but over time, he expects it to accelerate Palantir’s business.

The forecast overshadowed mixed trends for the latest quarter, in which Palantir topped revenue expectations but delivered a surprise adjusted loss.

The company posted a net loss of $176.7 million, or 9 cents a share, whereas it lost $138.6 million, or 7 cents a share, in the year-ago quarter. After adjustments, Palantir reported a loss per share of 1 cent, while it had notched adjusted earnings per share of 4 cents a year earlier. Analysts surveyed by FactSet were modeling adjusted EPS of 3 cents.

Read: Nvidia stock tumbles after company says revenue fell way shy of expectations

Palantir increased its revenue to $473.0 million from $375.6 million, whereas analysts were forecasting $465.8 million. Commercial revenue grew by 46% and U.S. government revenue ticked up by 27%. Overall U.S. revenue was up 45% to $290 million.

Shares of Palantir have dropped 55% over the past 12 months as the S&P 500

has fallen 6.7%.

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