Palantir Technologies Delivers Strong Commercial Growth Amid AI Adoption Surge February 25, 2026
Company Overview
Palantir Technologies Inc operates as a leading data analytics and artificial intelligence platform provider, serving both commercial enterprises and government agencies. The company’s core business centres on its Ontology platform and Artificial Intelligence Platform (AIP) tools, which enable organisations to harness data for decision-making and operational efficiency across defence, healthcare, finance, and other industries.
Financial Performance Exceeds Expectations
Palantir’s FY25 results demonstrated robust performance, with group revenue and profit after tax and minority interests (PATMI) surpassing forecasts at 106% and 121% respectively. This outperformance was driven by stronger-than-expected momentum in the US commercial segment and continued strength in government contract execution and new awards.
Looking ahead, the company projects impressive growth for 1Q26e, with group revenue expected to increase 74% year-on-year to US$1.53 billion. Adjusted operating income is forecast to rise 123% year-on-year to US$872 million, reflecting significant operating leverage benefits.
Commercial Segment Reaches New Heights
The standout performance came from Palantir’s commercial division, which achieved a new growth high with revenue increasing 82% year-on-year to US$677 million, representing a substantial acceleration from 31% growth in 4Q24. Commercial total contract value surged 161% year-on-year to US$2.6 billion in 4Q25, with half originating from the US market.
The US commercial segment particularly excelled, with revenue up 137% year-on-year to US$507 million, a dramatic improvement from 63% growth in 4Q24. This highlights increasing demand for AI production applications among large US enterprises. The segment now accounts for 36% of total group revenue, up from 22% two years prior.
Government Segment Maintains Strong Momentum
Government revenue also performed well, growing 60% year-on-year to US$730 million, up from 41% in 4Q24. This growth was supported by continued execution in existing programmes and new contract awards from the Department of Defence and civil agencies. US government revenue rose 66% year-on-year to US$570 million, whilst international government revenue increased 43% year-on-year, driven primarily by UK operations. Notably, the US Navy awarded Palantir a US$448 million contract to modernise shipbuilding supply chains.
Investment Recommendation
Phillip Securities Research maintains a BUY recommendation with a target price of US$190, revised down from US$208. Despite the lower target price, reflecting normalised long-term growth expectations and increased competitive pressure from analytical AI providers, the firm remains positive on Palantir’s prospects, citing the company’s Ontology platform advantages and AIP tools driving enterprise AI adoption beyond defence into commercial industries.
Frequently Asked Questions
Q: What drove Palantir’s strong FY25 performance?
A: FY25 group revenue and PATMI exceeded expectations at 106% and 121% of forecasts respectively, driven by stronger-than-expected US commercial momentum and continued strength in US government contract execution and new awards.
Q: How is the commercial segment performing?
A: Commercial revenue achieved a new growth high, increasing 82% year-on-year to US$677 million, with commercial total contract value growing 161% year-on-year to US$2.6 billion in 4Q25.
Q: What are Palantir’s growth projections for 1Q26e?
A: Palantir expects group revenue to grow 74% year-on-year to US$1.53 billion, with adjusted operating income projected to rise 123% year-on-year to US$872 million, driven by operating leverage.
Q: How significant is the US commercial segment?
A: US commercial revenue accelerated to 137% year-on-year growth, reaching US$507 million, and now accounts for 36% of group revenue, up from 22% two years ago.
Q: What is driving government segment growth?
A: Government revenue grew 60% year-on-year to US$730 million, supported by continued execution in existing programmes and new awards from the Department of Defence and civil agencies.
Q: What is Phillip Securities Research’s recommendation?
A: The firm maintains a BUY recommendation with a target price of US$190, down from US$208, remaining positive on Palantir’s Ontology platform advantages and AIP tools driving enterprise AI adoption.
Q: What major contract did Palantir recently secure?
A: The US Navy awarded Palantir a US$448 million contract to modernise the shipbuilding supply chain and accelerate the delivery of naval vessels.
This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.
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About the author
Paul Chew
Paul has more than 25 years of experience as a fund manager and sell-side analyst. He currently covers sectors such as healthcare, electronics, telecommunications, conglomerates, small caps, and strategy.
He graduated from Monash University and has completed both his Chartered Financial Analyst and Australian CPA programme.
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