Palantir Technologies (NASDAQ: PLTR) reported a 96% year-over-year increase in third-quarter 2026 revenue to $2.31 bn, driven by accelerating demand for its artificial intelligence software and a sharp expansion of its US commercial business.
The company generated approximately $1.13 bn in GAAP net income during the quarter, reflecting a net profit margin of 49%.
- Palantir’s Q3 2026 revenue increased 96% year over year to $2.31 bn, while GAAP net income reached approximately $1.13 bn.
- US commercial revenue surged 148% to $984 mn, exceeding US government revenue for the first time in the company’s history.
- CEO Alex Karp attributed the expansion to demand for enterprise AI and argued that businesses need secure operating systems to deploy AI at scale.
In a November 2 letter to shareholders, co-founder and CEO Alex Karp described the results as evidence of an unusually rapid expansion for a software company operating at Palantir’s scale.
The company also reached a milestone in its business mix, with US commercial revenue exceeding US government revenue for the first time.
Karp said the shift reflected growing adoption of Palantir’s AI platforms across industries as companies seek to integrate advanced language models into their existing operations.
US commercial revenue jumps 148% to $984 mn
Palantir’s US commercial business generated $984 mn in third-quarter revenue, an increase of 148% from the corresponding period in 2025 and 29% from the previous quarter.
US government revenue reached $953 mn, rising 96% year over year and 18% sequentially. As a result, commercial customers became Palantir’s largest source of revenue in the United States, marking a significant change for a company historically associated with government, intelligence and defense contracts.
Total US revenue increased 119% year over year to $1.94 bn, accounting for the majority of the company’s quarterly sales.
Karp attributed the expansion to strong demand for what Palantir describes as sovereign AI solutions, which allow organizations to deploy AI capabilities while maintaining control over sensitive data and operational systems.
He said the pace of customer adoption had also changed significantly, with some sales processes that previously required months or years now being completed within weeks.
According to Karp, enterprises are increasingly recognizing the need to integrate AI into core business processes rather than treating it as a standalone technology.
The company serves customers across sectors including financial services, insurance, healthcare, manufacturing and government.
Palantir reports record quarterly profit
Palantir’s financial performance also reflected substantial profitability alongside its rapid revenue growth.
GAAP net income attributable to common shareholders reached $1.13 bn, compared with approximately $476 mn in the third quarter of 2025.
GAAP operating income totaled $1.08 bn, representing an operating margin of 47%. Adjusted operating income reached $1.43 bn, equivalent to a 62% margin, while adjusted free cash flow amounted to approximately $1.22 bn.
The company reported cash from operations of $1.20 bn and ended the period with $10.4 bn in cash, cash equivalents and US Treasury securities. Diluted earnings per share were $0.44 on both a GAAP and adjusted basis.
Palantir closed 212 transactions worth at least $1 mn during the quarter, including 107 deals valued at $5 mn or more and 64 deals worth at least $10 mn. Total contract value reached $2.92 bn, an increase of 6% from the previous year.
The remaining deal value associated with its US commercial business rose 79% year over year to $6.52 bn, indicating a substantial pipeline of contracted business.
Karp warns of risks from enterprise AI deployment
Beyond the financial results, Karp’s shareholder letter outlined his view of how artificial intelligence could reshape major industries.
He argued that organizations across banking, insurance, healthcare, legal services and other sectors face growing pressure to modernize their operations as AI capabilities advance.
Karp maintained that large language models, when deployed without appropriate controls and integration with enterprise systems, can create significant operational risks.
In his assessment, organizations need software infrastructure capable of connecting AI models to internal data, employees, business processes and security requirements.
Palantir positions its Foundry, Ontology and Artificial Intelligence Platform products as tools designed to provide that infrastructure.
Karp argued that enterprise AI adoption depends on more than the underlying performance of language models. Companies must also establish clear operating procedures, access controls and safeguards governing how those models interact with business systems.
He suggested that the ability to integrate AI securely into established workflows would increasingly determine which organizations benefit from the technology.
These assessments represent Palantir’s strategic position rather than an established outcome for the wider software industry.
CEO emphasizes customer control and national security
Karp also used the letter to address the relationship between AI companies and their customers. He argued that an important question facing the technology industry is whether software providers’ commercial incentives remain aligned with the interests of the organizations using their products.
According to Karp, Palantir aims to build technology that allows customers to retain control over their data, systems and economic value.
He contrasted that approach with business models in which technology suppliers capture an increasing share of the value created by their customers.
The letter also reaffirmed Palantir’s commitment to its government and defense customers.
Karp noted that the company has worked with the US military and allied institutions for more than two decades, spanning five presidential administrations.
He framed Palantir’s defense work as a means of improving operational effectiveness and protecting military personnel, arguing that advanced technology can contribute to deterrence and national security.
The CEO also credited the company’s organizational culture and concentration of technical talent for its financial performance.
Palantir raises full-year revenue outlook
Following its third-quarter performance, Palantir raised its full-year 2026 revenue guidance to a range of $8.530 bn to $8.534 bn.
The company also increased its US commercial revenue forecast to more than $3.559 bn, representing expected annual growth of at least 143%.
Adjusted operating income for the year is now projected at between $5.245 bn and $5.249 bn, while adjusted free cash flow is expected to reach $4.8 bn to $5.0 bn.
Karp expressed confidence that demand for enterprise AI would continue to support the company’s expansion, although the durability of current growth rates will depend on sustained customer spending, successful software deployments and competition across the AI market.
For the fourth quarter, Palantir forecast revenue of $2.649 bn to $2.653 bn, alongside adjusted operating income of $1.640 bn to $1.644 bn.
The results underscore Palantir’s rapid transformation from a predominantly government-focused software supplier into a business with substantial commercial exposure, as organizations increase investment in AI-driven operations.
