Palantir Crushes Wall Street Estimates By $125 Million

Palantir Technologies just beat Wall Street expectations across every major headline figure for the second quarter, sending its shares climbing more than 7 percent in after hours trading. The data analytics firm reported $1.94 billion in revenue, which easily topped the consensus estimate of $1.81 billion and accelerated from the previous quarter's growth rate. Adjusted earnings reached 41 cents per share, beating the roughly 35 cents modeled by analysts.

U.S. commercial customers drove much of the success, with that segment surging 149 percent year over year to $764 million. Government revenue also performed strongly, gaining 90 percent to reach $809 million. Alongside the financial beat, Palantir closed 220 contracts worth at least $1 million each and booked a record $2.13 billion in U.S. commercial total contract value, signaling strong ongoing demand for its artificial intelligence solutions.

Following the strong quarter, management raised its full year revenue outlook to a range of $8.150 billion to $8.158 billion, representing about 82 percent growth. Chief Executive Alex Karp pointed to high customer demand for data control and artificial intelligence sovereignty as the main driver. Even with the post earnings share price jump toward $135, the stock still sits below its 12 month high as traders debate broader sector valuations.

Traders should watch how quickly these massive commercial bookings convert into recognized revenue as the company heads into the third quarter. Management already guided third quarter revenue to roughly $2.16 billion, setting high expectations for the rest of the year.