Data-mining and analytics company Palantir (NYSE:PLTR) reported Q4 FY2023 results exceeding Wall Street analysts' expectations, with revenue up 19.6% year on year to $608.4 million. On the other hand, the company expects next quarter's revenue to be around $614 million, slightly below analysts' estimates. It made a non-GAAP profit of $0.08 per share, improving from its profit of $0.04 per share in the same quarter last year.
Is now the time to buy Palantir? Find out by accessing our full research report, it's free.
Palantir (PLTR) Q4 FY2023 Highlights:
- Revenue: $608.4 million vs analyst estimates of $602.8 million (0.9% beat, billings beat by a larger margin)
- EPS (non-GAAP): $0.08 vs analyst estimates of $0.08 (5.4% beat)
- Revenue Guidance for Q1 2024 is $614 million at the midpoint, below analyst estimates of $617.2 million
- Management's revenue guidance for the upcoming financial year 2024 is $2.66 billion at the midpoint, in line with analyst expectations and implying 19.5% growth (vs 16.7% in FY2023)
- Management's adjusted operating income guidance for the upcoming financial year 2024 is $842 million at the midpoint, well above analyst expectations of $738 million
- Free Cash Flow of $296.3 million, up 110% from the previous quarter
- Gross Margin (GAAP): 82.1%, up from 79.5% in the same quarter last year
- Market Capitalization: $37.04 billion
Started by Peter Thiel after seeing US defence agencies struggle in the aftermath of the 2001 terrorist attacks, Palantir (NYSE:PLTR) offers software as a service platform that helps government agencies and large enterprises use data to make better decisions.
Data Analytics
Organizations generate a lot of data that is stored in silos, often in incompatible formats, making it slow and costly to extract actionable insights, which in turn drives demand for modern cloud-based data analysis platforms that can efficiently analyze the silo-ed data.
Sales Growth
As you can see below, Palantir's revenue growth has been strong over the last two years, growing from $432.9 million in Q4 FY2021 to $608.4 million this quarter.
This quarter, Palantir's quarterly revenue was once again up 19.6% year on year. We can see that Palantir's revenue increased by $50.19 million quarter on quarter, which is a solid improvement from the $24.84 million increase in Q3 2023. Shareholders should applaud the re-acceleration of growth.
Next quarter's guidance suggests that Palantir is expecting revenue to grow 16.9% year on year to $614 million, in line with the 17.7% year-on-year increase it recorded in the same quarter last year. For the upcoming financial year, management expects revenue to be $2.66 billion at the midpoint, growing 19.5% year on year compared to the 16.7% increase in FY2023.
When a company has more cash than it knows what to do with, buying back its own shares can make a lot of sense–as long as the price is right. Luckily, we’ve found one, a low-priced stock that is gushing free cash flow AND buying back shares. Click here to claim your Special Free Report on a fallen angel growth story that is already recovering from a setback.
Cash Is King
If you've followed StockStory for a while, you know that we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. Palantir's free cash flow came in at $296.3 million in Q4, up 291% year on year.
Palantir has generated $722.1 million in free cash flow over the last 12 months, an eye-popping 32% of revenue. This robust FCF margin stems from its asset-lite business model, scale advantages, and strong competitive positioning, giving it the option to return capital to shareholders or reinvest in its business while maintaining a healthy cash balance.
Key Takeaways from Palantir's Q4 Results
It was great to see Palantir expecting revenue growth to accelerate next year. Icing on the cake is adjusted operating income well above expectations, showing that the company is not sacrificing profits for the higher topline growth. We were also glad its revenue in the quarter beat and its gross margin improved. A minor negative was that revenue guidance for next quarter missed analysts' expectations. Overall, this was a very solid quarter for Palantir. The stock is up 11.7% after reporting and currently trades at $18.68 per share.
So should you invest in Palantir right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.
One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 50% year on year and best-in-class SaaS metrics it should definitely be on your radar.