Palantir has delivered a landmark Q2-2025, surpassing $1 billion in quarterly revenue for the first time, reflecting a 48 percent year-over-year and 14 percent sequential increase.
U.S. revenue of Palantir climbed 68 percent to $733 million, driven by 93 percent growth in U.S. commercial revenue to $306 million and a 53 percent rise in U.S. government revenue to $426 million. Excluding strategic commercial contracts, total revenue still grew 49 percent year-over-year.
Palantir CEO Alex Karp highlighted the transformative impact of AI on the company’s performance, pointing to a Rule of 40 score of 94 percent and strong U.S. growth, with total U.S. revenue up 68 percent and U.S. commercial revenue up 93 percent year-over-year. He noted that the company is forecasting its highest-ever sequential quarterly revenue growth, equating to 50 percent growth compared to the prior year.
The company closed 157 deals valued at $1 million or more, including 66 above $5 million and 42 over $10 million. Total contract value reached a record $2.3 billion, up 140 percent, with U.S. commercial TCV growing 222 percent to $843 million. Remaining deal value in U.S. commercial climbed 145 percent to $2.8 billion.
Profitability remained strong with GAAP net income of $327 million and adjusted EPS of $0.16. Adjusted operating income was $464 million, reflecting a 46 percent margin, while free cash flow reached $569 million with a 57 percent margin. The company ended the quarter with $6 billion in cash and no debt, achieving a Rule of 40 score of 94 percent.
Palantir’s growth was powered by rising demand for its Artificial Intelligence Platform, which is seeing widespread adoption across industries such as healthcare, finance, manufacturing, and government.
Notable deployments included Fannie Mae using AIP to detect mortgage fraud in seconds, TeleTracking optimizing hospital operations, and Land O’Frost cutting production planning time from 40 hours to just 30 minutes.
The U.S. State Department reduced its foreign service candidate clearance time from 60 to 12 days using Palantir’s tools. At DevCon 3, the company unveiled enhancements to its AI suite, including AI FDE, AI Workbench, and Ontology-as-Code to streamline development and automation.
Commercial customer count grew 48 percent year-over-year to 692, with U.S. commercial customers increasing 64 percent to 485. Net dollar retention remained robust at 128 percent, reflecting high customer satisfaction and expansion.
For Q3 2025, Palantir expects revenue between $1.083 and $1.087 billion and adjusted operating income between $493 and $497 million. Full-year 2025 guidance was raised, with revenue now projected between $4.142 and $4.150 billion and U.S. commercial revenue expected to exceed $1.302 billion, representing at least 85 percent growth. Adjusted operating income for the year is forecast between $1.912 and $1.920 billion, and adjusted free cash flow between $1.8 and $2.0 billion.
Strategically, Palantir is intensifying its focus on AI as the core of its growth strategy while expanding commercial traction and deepening government engagements. CEO Alex Karp positioned the company’s mission as democratizing AI for practical, frontline use with a strong emphasis on human oversight. International growth and vertical expansion into healthcare, energy, and financial services continue to be key priorities.
Despite rich valuations, Palantir leadership believes its strong operating metrics, deep backlog, and rapid deal momentum justify sustained investor confidence. Q2 2025 marks a breakout quarter that positions Palantir as a formidable force in the accelerating global AI landscape.
