Tag Archives: Palantir Technologies

Palantir’s $100 Million Loss

Palantir released its earnings for the first quarter of 2021 today, and it’s not looking good. This 18 year old company that has never made a profit turned in a net loss of $123 million, versus $54 million in the first quarter of 2020.

This is actually a little better than the full year results in 2020, where losses reached nearly $100 million per month. But quarter on quarter, the picture is significantly worse. I’ll be curious to see if last year’s pattern of escalating losses through the year holds again in 2021.

Selling and general/administrative expenses held Palantir’s results down. I saw a similar picture in 2020, and one factor may be the extensive free trials they give customers. I question whether this business model can produce profits, especially given its long history of burning cash. Amazon and Google invested for the future and delayed profits, but not into nonexistence. Google was profitable in 3 years and Amazon in 7.

These poor results don’t seem to trouble CEO Alexander Karp, though. He took home $1 billion in compensation last year while the company lost a similar amount. Hey Alex, how about returning that so the shareholders can at least break even?

Dig into these posts for more on Palantir:

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Palantir Is Growing at a Snail’s Pace

Despite its lofty valuation, Palantir Technologies Inc. is barely growing:

In the fourth quarter, he points out, Palantir signed 21 deals worth more than $5 million, and 12 of more than $10 million. But he adds that it isn’t clear how many of those are actually new customers, as opposed to new projects with existing customers.

He notes that given total customer count went to 139 at year end from 132 one quarter earlier, it would seem that most of the new work is from previous customers. “New customer growth is what will ultimately be required to show the commercial momentum the market wants to see longer term,” he writes. “In this regard, the data is still mixed.”

Seven new customers, net, in 3 months? Not terribly impressive for a company with a market cap of $43 billion and a forward price/earnings ratio of 169. That ratio implies a company that is growing like crazy, not signing a couple of customers a quarter.

Other reports have indicated growth in their core government contracting business has slowed to a crawl. On the commercial side, 20% of revenue comes from a single customer. The business in general is concentrated in a handful of large customers, any one of whose departure would sting, big time.

Until Palantir grows at a rate to justify its buoyant stock price, I’ll be keeping my distance.

For more on Palantir, check out these posts:

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Photo: “PandoMonthly – April 2012 – Sarah Lacy Interviews Peter Thiel” by thekenyeung is licensed under CC BY-NC-ND 2.0