Palantir stock drops even after company reports 52% sales growth in first earnings statement

  • The software and analytics company went public in September, 17 years after it was co-founded by Peter Thiel, CEO Alex Karp and others.
  • The stock dropped in extended trading. As of the close, it was up 46% from its debut.
  • Palantir said that its "customer concentration is decreasing," and that it now gets a smaller percentage of revenue from its top clients.

Palantir, the maker of software and analytics tools for the defense industry and large corporations, reported 52% revenue growth in its first earnings announcement since going public in September.

The stock fell more than 3% in extended trading after plunging 8.7% during the regular trading day.

Here are the key numbers:

  • Earnings: Loss of 94 cents per share vs loss of 24 cents a year earlier.
  • Revenue: $289.4 million vs $279.4 million expected, according to analysts polled by Refinitiv.

For the third quarter, the company reported an operating loss of $847.8 million due to an $847 charge for stock-based compensation.

Palantir raised its full-year revenue guidance to between $1.07 billion and $1.072 billion, which would represent 44% growth from a year earlier. The company previously said sales for the year would reach $1.06 billion. Adjusted operating income in 2020 is expected to be between $130 million and $136 million.

Co-founded in 2003 by tech investors Peter Thiel and Joe Lonsdale, CEO Alex Karp and others, Palantir provides data analytics software and services to government agencies, including the Defense Department, the U.S. Food and Drug Administration and the intelligence community. It also sells to companies like aircraft manufacturer Airbus and energy producer BP.

Palantir's stock opened at $10 in its direct listing on Sept. 30, and has since climbed 46% to close at $14.58 on Thursday. Investors are paying close attention to the company's customer base, which was limited to 125 in the first half of 2020. As the company focuses more on software and less on services, it's trying to make it easier for clients to start using the product so it can expand its reach and bring down sales costs.

"Our customer concentration is decreasing," the company said in the release. Palantir said that 61% of its revenue for the first nine months of the year came from its top 20 customers, down from 68% over the same stretch in 2019. The company didn't provided an updated customer count.

The company also said that new contracts in third quarter included a $91 million deal with the U.S. Army, a $36 million contract with the National Institutes of Health $36 million and a $300 million renewal with an aerospace customer.

Palantir didn't break out third-quarter revenue by its commercial and government segments, another key detail for investors. In the first half of the year, 54% of revenue came from government clients, with the rest coming from commercial customers.

Company executives will host a conference call to discuss results at 5 p.m. ET.

This is breaking news. Please check back for updates.

WATCH: Full interview with Palantir co-founder Joe Lonsdale on company outlook

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