Palantir reported another very strong quarter in Q4, with revenue accelerating to 70%, an impressive 57 point acceleration over the last ten quarters, while guiding for revenue to accelerate further to 73.6% in Q1.
US commercial momentum remained unabated, with revenue accelerating 16 points sequentially to 137% YoY, surpassing the $500 million mark in the quarter. When looking at the strength of both QoQ and YoY growth, it’s likely Palantir represents the highest AI segment growth across the AI universe.
On top of that, Palantir initially guided for fiscal 2026 revenue to accelerate from 56.1% to nearly 61% YoY, driven by US commercial revenue accelerating six points to >115% YoY. Driving such an acceleration at these growth rates is undeniably difficult, yet there are hints that Palantir could go above and beyond these figures by this time next year.
Unlike 99% of other companies reporting this season, Palantir’s call offered little substance to sift through, with more clues on its growth opportunities hidden in the key metrics – detailed for you below.
Q4 Revenue Growth Accelerates to 70%, FY26 Guided to Accelerate to 61%
Palantir reported revenue of $1.41 billion in Q4, accelerating to 70% YoY while QoQ growth ticked 1.5 points higher to 19.1%, and marking a 50 point acceleration over the last two years. This also is Palantir’s highest revenue growth in their history as a public company.
More impressively, Palantir guided for this revenue acceleration to continue into Q1 and for 2026, suggesting that the AI-driven growth engine that propelled shares higher through 2024 and 2025 is still intact, and potentially strengthening. Q1 revenue was guided to be $1.532 billion to $1.536 billion, accelerating 3.6 points to 73.6% YoY at midpoint (and what would be a fresh record growth rate), though QoQ growth would be just 9%.
For 2025, Palantir reported $4.48 billion in revenue, up 56.1% YoY, and accelerating 27.3 points from 28.8% growth in 2024. Total commercial revenue rose 60% YoY to $2.07 billion, while government remained a key contributor with revenue up 53% YoY to $2.40 billion. 2025’s initial guidance also helps provide some perspective on just how strong Palantir’s year was, and how 2026 could materialize if this robust AI-driven momentum continues (which key metrics support) – Palantir initially guided for 30.9% growth, but ended the year more than 25 points higher at 56.1%.
For 2026, Palantir offered an initial guide for $7.182 billion to $7.198 billion, up 60.7% YoY at midpoint, or $900 million ahead of consensus for $6.29 billion for 42.8% growth. This would also mark a 4.6 point acceleration, a significant feat considering the swift acceleration the company saw through the back half of 2025.
US Commercial Growth Guided to Accelerate in FY26 to 115%
Palantir’s AIP-driven US commercial segment remains the company’s core revenue driver, with growth accelerating once again in Q4 to the fastest rate in four years. What’s more impressive is that Palantir not only has guided for US commercial revenue to more than double in 2026, but that it was guided to accelerate from 2025’s already-rapid 109% growth.
US commercial revenue rose 137% YoY and 29% QoQ to $507 million in Q4, surpassing a $2 billion annualized run rate in the quarter, up from a $1 billion run rate at the start of 2025. QoQ growth accelerated only one point from 28% in Q3, though accelerating sequentially at this pace is difficult.
On a YoY view, US commercial continued to accelerate, with the 137% growth in Q4 marking a 16 point acceleration from 121% YoY in Q3. Since the start of the year, US commercial revenue growth has accelerated a tremendous 66 points.
While US growth continues to accelerate, Palantir lags greatly in International. International commercial revenue is not nearly as strong as US commercial with revenue growth of just 8% YoY and 12% QoQ to $170 million in Q4. For context, International commercial revenue has not grown faster than 10% YoY in the last six quarters. However, despite the softness in international, overall commercial revenue growth managed to accelerate from 73% to 82% YoY in Q4.
For 2025, US commercial revenue rose 109% YoY to $1.465 billion, driven by the strong acceleration in the back half with Palantir reporting back-to-back quarters with >120% growth.
For 2026, Palantir delivered an initial guide for $3.144 billion in US commercial revenue, representing growth of >115% YoY, a six point acceleration. It’s hard to understate the strength of this initial guide – not only is Palantir doubling revenue once again after doubling in 2025, but that there is a high likelihood that high AIP demand will translate into stronger growth as the year pans out.
What Palantir’s Beat/Raise Pattern from 2025 Suggests about 2026
Palantir’s recent beat/raise trends from 2025 shed light into how 2026 could shape up for US commercial revenue, if the company can maintain a similar trajectory throughout this year on strong AI momentum.
Looking back to 2025, Palantir’s first guide for US commercial revenue was for 54% YoY growth to $1.08 billion. This was raised to 68% YoY to $1.18 billion by Q1, and raised again to 85% YoY to $1.30 billion by Q2. By Q3, management raised US commercial growth to 104% YoY to $1.43 billion, with the final number being the 109% reported this quarter, for a total raise of 55 points throughout the year.
The challenge for Palantir is that its initial guide for 2026 starts at a much higher base at >115%, though its pattern through 2025 and strong key metrics (outlined below) suggest that upside to this forecast is likely.
Plotting out a modest outperformance through the year and a similar outperformance as 2025 show two different trajectories for US commercial revenue growth. Under the modest outperformance scenario, or along the lines of a five point raise to growth each quarter and a small Q4 beat, this would project revenue out to ~133% YoY, or 18 point upside versus this initial guide and a 24 point YoY acceleration. To put this in dollar terms, this scenario would project revenue of $3.42 billion, or ~$280 million above guidance (smaller than 2025’s $385 million beat).
If Palantir can outperform to a similar degree as 2025, such as 45-50 points above the first guidance, the revenue projection for US commercial would look much different. This scenario would need around a 10 to 12 point raise each quarter, and could project revenue as ~160% YoY, a 51 point acceleration. In dollar terms, this would project $3.82 billion, or ~$680 million above guidance.
The main takeaway here is that even a modest outperformance and guidance raises of a few points each quarter could easily drive US commercial revenue growth to a double-digit acceleration from 2025’s 109% growth.
Government Revenue Remains Strong
Outside of US commercial, Palantir’s government remained strong with 60% YoY and 15% QoQ growth in the fourth quarter to $730 million, accelerating from 55% YoY and 14% QoQ in Q3.
It cannot be ignored that government still remains critical to Palantir’s success despite the unwavering US commercial momentum, as government accounted for nearly 52% of revenue in Q4.
US government revenue rose 66% YoY and 17% QoQ to $570 million, accelerating from 52% YoY and 14% QoQ in Q3, whereas international revenue grew 43% YoY and 9% QoQ to $160 million, driven by work in the UK.
Palantir said this US growth was driven by its mission impact across the DoD and accelerating momentum in civil agencies, highlighting that it was awarded an up to $448 million contract with the US Navy to “modernize the shipbuilding supply chain and accelerate delivery of naval vessels.” Palantir added that Maven usage reached all-time highs and will “continue to be rolled out to all combatant commands and many more networks over the rest of this government fiscal year.”
However, CEO Alex Karp downplayed Palantir’s international growth outlets and ability to meaningfully accelerate growth especially in Europe, saying that “Palantir is in a unique position where we really don't have the bandwidth to do anything that's difficult outside of America. So — and as this learning curve goes on, it's more and more difficult to help people understand how to implement these things and the demand in the U.S. is so great.”
Net Retention Rate Expands 5 Points, Rule of 40 Expands to 127%
While Palantir’s AI-driven revenue growth metrics are the strongest among AI-exposed software, its key metrics remained robust in Q3 and support this strong AI-driven growth curve persisting through 2026.
Net Retention Rate Expands 5 Points
Palantir’s NRR accelerated another 5 points sequentially to 139% in Q4; on a YoY basis, NRR has risen 19 points. Should Palantir continue to drive similar NRR expansion through 2026 as it expands the 680 >$1 million deals it signed in 2025, there is a chance they move above the 150% threshold at some point in 2026.
RPO Surges – Up 62% QoQ and 143% YoY
RPO saw a meaningful step up in Q4, rising 62% QoQ to $4.21 billion, with YoY growth accelerating from 65.6% in Q3 to 143.4% in Q4. This also represented the company’s strongest RPO growth since the start of 2023 on both a YoY and QoQ basis.
This strength was also reflected in billings, which rose 91.1% YoY and 21.5% QoQ to $1.49 billion, a sharp acceleration from 49% YoY and 11.5% QoQ in Q3. Both of these key metrics witnessing this sharp step-up in tandem provides further confidence in Palantir’s 2026 accelerations panning out with the potential for upside to its initial guidance as each quarter progresses.
Rule of 40 Expands 13 Points QoQ and up 46 Points YoY
Palantir also stands out for its exceptional Rule of 40 score which continued to expand in Q4, which the company defines as revenue growth plus adjusted operating margin. It’s not just the fact that Palantir’s Rule of 40 score is now well beyond 100%, but the fact the company is expanding this margin by a significant degree:
“Our Rule of 40 score reached new heights at 127%, up 46 points year-over-year and 13 points quarter-over-quarter, proving that hyper growth and exceptional profitability aren't mutually exclusive, but rather the inevitable outcome of Palantir delivering transformational impact at scale.”
For 2025, Palantir had a Rule of 40 score of 106%, with management guided for an initial Rule of 40 score of 118% for 2026.
Second Highest TCV Growth on Record
Palantir also booked record TCV of $4.26 billion, up 138% YoY, with commercial TCV of $2.6 billion, up 161% YoY and 83% QoQ, accelerating from 132% YoY and 32% QoQ in Q3.
RDV was $11.2 billion, increasing 105% YoY and 29% QoQ, accelerating from 91% YoY and 21% QoQ; however, US commercial RDV slowed from 199% YoY and 30% QoQ in Q3 to 145% YoY and 21% QoQ in Q4.
Again, the simultaneous accelerations in Palantir’s key metrics in Q4 signals that the company’s growth engine through 2026 is visibly strengthening, providing more confidence in upside to Palantir’s guidance for both revenue and US commercial revenue.
Margins Continue to Strengthen
While its revenue growth and acceleration are second-to-none in AI software, so are Palantir’s margins, with the company showcasing an impressive ability to drive margin expansion of >10 points while simultaneously accelerating revenue. For example, Palantir’s adjusted operating margin in Q4 was a record 57.4%, well ahead of its guidance for 52.4% and expanding 12 points YoY. This is a remarkable feat as it highlights Palantir’s ability to maintain its cost profile despite meaningfully accelerating revenue quarter after quarter. Adjusted EBITDA margin also showed strong expansion, coming in at 57%, up 6 points QoQ and 11 points YoY.
Looking down the line, gross margins expanded nicely in Q4, with GAAP gross margin at 85%, up 6 points YoY and 3 points QoQ. Adjusted gross margin also expanded but at a smaller degree, up 3 points YoY and 2 points QoQ to 85%.
The operating margin expansion was where Palantir shone. GAAP operating margin was 41% in Q4, up 40 points YoY (coming against a low comp due to the one-time stock appreciation rights (SARs) expense) and 8 points QoQ. As noted above, adjusted operating margin was 57.4%, up 12 points YoY and 6 points QoQ. Palantir guided for adjusted operating margin to remain strong in Q1 to 56.8% at midpoint, up 13 points YoY and down marginally QoQ.
Turning to net margin, the expansion was less pronounced but still visible. GAAP net margin was 43%, up 33 points YoY (again vs the low SARs comp) and 3 points QoQ. Adjusted net margin was 46%, up 5 points YoY and 1 point QoQ.
It’s easier to see how Palantir’s margins have strengthened when looking at the full-year. GAAP operating margin for 2025 was 32%, up 21 points. Adjusted operating margin expanded 11 points to 50%, and Palantir has initially guided for adjusted operating margin to expand 7.5 points in 2026 to 57.5%.
Down the line, GAAP net margin was 36% for the year, up 20 points, and adjusted net margin was 43%, up 8 points.
EPS
Palantir reported $0.25 in adjusted EPS in Q4, up 78.6% YoY, with GAAP EPS coming in at $0.24, up 700% YoY and beating estimates by 8.7% and 33.3% respectively. Palantir did not provide guidance for Q1, though consensus estimates currently call for adjusted EPS of $0.21, up 60.2% YoY, and GAAP EPS of $0.16, up 100% YoY.
For the full year, Palantir delivered adjusted EPS of $0.75, up 82.9% YoY, and GAAP EPS of $0.63, up 231.6% YoY. Again, Palantir did not provide guidance, though current consensus points to adjusted EPS up 39.7% to $1.01 and GAAP EPS up 30% to $0.82.
Cash Flows Robust
Palantir’s cash flows were robust in Q4, and management guided for adjusted FCF margin to expand in 2026 from an already strong 51% in 2025.
Operating cash flow was $777.3 million in Q4 for a 55% margin, down slightly from a 56% margin in the year ago quarter but rebounding solidly from a 43% margin in Q3. For the year, Palantir delivered operating cash flow of $2.13 billion, or a 48% margin, up from 40% in 2024.
Adjusted free cash flow was $791.4 million in Q4 for a 56% margin, down from a 63% margin a year ago but up from 46% in Q3. For 2025, Palantir generated $2.27 billion in adjusted FCF for a 51% margin, up from 44% in 2024.
For 2026, Palantir guided for a step up in adjusted FCF, projecting it to increase more than 77% YoY to $3.925-$4.125 billion. This would represent an adjusted FCF margin of 56%, a five point expansion from 2025.
Palantir’s balance sheet remained extremely healthy with cash of $7.18 billion and zero debt.
Valuation
Palantir’s valuation remains in uncharted territory, though forward multiples have come down quite a bit when factoring in FY26’s guidance and the new fiscal year adjustment.
On a forward PS basis, Palantir is trading at a 50x multiple with the initial 2026 guide for $7.19 billion in revenue. This is the cheapest shares have been valued since late April 2025, and a meaningful ‘discount’ to the >100x multiple Palantir commanded at the end of 2025.
On the bottom line, Palantir’s multiple has also come down, with shares now trading at 145x forward PE, nearly half of the 260-280x multiple it held from the end of 2025 and only a ~30% premium to its 112x average five-year multiple.
Conclusion
Palantir’s Q4 report showed that the company’s AIP-driven momentum remains robust with no signs of slowing, further supported by most key metrics accelerating in unison. Palantir’s NRR expanded 5 points to 139%, its Rule of 40 score expanded 46 points YoY to 127%, and record TCV and RPO were the cherry on top of a strong quarter.
Palantir also guided for revenue to accelerate to nearly 61% YoY in 2026, driven by US commercial revenue accelerating to >115% YoY. Driving an accelerate at this multi-billion dollar scale is difficult, yet the company’s key metrics suggest growth rates may continue to move higher.
Damien Robbins, Equity Analyst at I/O Fund contributed to this analysis.
Please note: The I/O Fund conducts research and draws conclusions for the company’s portfolio. We then share that information with our readers and offer real-time trade notifications. This is not a guarantee of a stock’s performance and it is not financial advice. Please consult your personal financial advisor before buying any stock in the companies mentioned in this analysis. Beth Kindig and the I/O Fund own shares in PLTR at the time of writing and may own stocks pictured in the charts.
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