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Palantir Q3 2025 Earnings Highlights, Guidance and Hidden Signals from Earnings Call

Palantir Q3 2025 Earnings: 10 Key Takeaways from Results, Guidance, and What the Transcript Really Revealed

Palantir delivered one of its strongest quarters ever in Q3 2025, with explosive U.S. commercial growth, record contract value wins, and extremely high profitability for a high-growth software company. Beyond the official press release and investor deck, the earnings call transcript revealed deeper strategic signals about enterprise AI adoption, customer behavior shifts, and operating leverage that investors should pay attention to.

Below is a combined listicle covering official financial highlights, forward guidance, management strategy commentary, and the most important hidden signals from the earnings call.

Revenue and growth
Total revenue: $1.181 billion, up 63% year over year and 18% quarter over quarter
US revenue: $883 million, up 77% year over year
US commercial revenue: $397 million, up 121% year over year and 29% quarter over quarter
US government revenue: $486 million, up 52% year over year

Profitability and cash flow
GAAP operating income: $393 million, 33% margin
Adjusted operating income: $601 million, 51% margin
GAAP net income: $476 million, 40% margin
GAAP EPS: $0.18
Adjusted EPS: $0.21
Adjusted free cash flow: $540 million, 46% margin
Cash, cash equivalents, and short-term treasuries: $6.4 billion

Commercial momentum and deals
Total contract value (TCV): $2.76 billion, up 151% year over year
US commercial TCV: $1.31 billion, up 342% year over year
US commercial remaining deal value (RDV): $3.63 billion, up 199% year over year
Deals closed in Q3:
204 deals over $1 million
91 deals over $5 million
53 deals over $10 million
Customer count: up 45% year over year

Rule of 40 and efficiency
Rule of 40 score: 114%
Adjusted operating margin: 51%
Strong operating leverage alongside rapid growth

2. Q4 2025 & FY2025 guidance

Revenue: $1.327 to $1.331 billion
Adjusted operating income: $695 to $699 million

Full year 2025 updated guidance
Revenue: $4.396 to $4.400 billion
US commercial revenue: above $1.433 billion, at least 104% growth
Adjusted operating income: $2.151 to $2.155 billion
Adjusted free cash flow: $1.9 to $2.1 billion
Management expects GAAP operating income and net income in every quarter of 2025

3. C-suite–driven enterprise-wide AI transformations

Management repeatedly stressed that deals are no longer about single use cases. Customers are reorganizing entire enterprises around Palantir AIP, with CEOs personally owning AI transformations. This shift to enterprise-wide deployments and org-level reorgs is discussed extensively on the call but not explicitly highlighted in the press release.

4. Sales cycles are compressing dramatically

Executives described customers moving from first contract to multi-year, large-scale expansion in months, not years. One example cited was an eightfold ACV expansion just five months after initial contract. The press release shows strong TCV numbers but does not explain how fast customers are upgrading and expanding.

5. AI FDEs and “AI Hivemind” as real production tools

Shyam Sankar went deep on AI FDE (AI development agents) and AI Hivemind, explaining how two human engineers plus AI agents replaced years of system integrator work in days. These products are mentioned lightly in materials, but the transcript makes clear they are already in production and driving real deployments. This is largely absent from the press release narrative.

6. Army-wide consolidation directive on Vantage

Shyam disclosed that the U.S. Army issued a public memo directing all Army organizations to consolidate on Vantage (built on Foundry + AIP). This is a major strategic government win with long-term implications, but it is not highlighted in the press release bullet points.

7. Headcount growing ~10% while revenue grows 63%

Management explicitly stated that Palantir headcount is up only about 10%, while revenue is up 63%, attributing this to internal use of AI FDEs to massively boost productivity. This operating leverage story is not clearly stated in the press release.

8. Europe described as stagnant and a drag

Alex Karp said U.S. growth is even more impressive because Europe is stagnant and dragging overall results. This geographic weakness is not mentioned in the press release, which focuses on headline growth.

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9. Strategic shift toward enterprise reorganization, not just software sales

Karp and Taylor described customers effectively doing “private equity–style transformations” in public companies, reorganizing operations around Palantir. This reframes Palantir as a transformation partner, not just a software vendor, which is not captured in the press release language.

10. Government pipeline hints beyond disclosed programs

Management hinted at multiple large defense and national security opportunities (NGC2, Maven, multi-theater conflicts) but declined to name specifics. This suggests upside optionality not reflected in official guidance or press materials.

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The simple takeaway

Palantir is showing rare combination of hyper growth and elite profitability, driven mainly by U.S. commercial AI adoption through AIP. The transcript suggests customers are moving from testing AI to restructuring entire companies around it. The biggest upside is enterprise scale AI transformation and strong operating leverage. The main risks are heavy dependence on U.S. growth, high expectations priced into the story, and reliance on continued AIP leadership versus competitors.

Thank you for reading this post. If you enjoy this post, please share it with your friends or family members. Let’s get life transformed together! Many thanks.

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