Key Highlights

  • Shares fell 7.75% pre-market to $164.52 from a $178.34 close.
  • Q3 Revenue rose 96% to $2.313 billion, topping the $2.2 billion estimate.
  • U.S. commercial total contract value bookings grew 11%, versus 153% growth in Q2.

Palantir Technologies (NASDAQ:PLTR) shares fell 7.75% in pre-market trading on Tuesday to $164.52, from a Monday close of $178.34. The decline came even though the third quarter beat estimates and full-year guidance was raised.

Contract Value Growth Draws Scrutiny

Revenue grew 96% year over year and 20% sequentially to $2.313 billion, ahead of an estimate near $2.2 billion. Adjusted EPS was $0.44, against $0.41 expected. U.S. revenue rose 119% to $1.937 billion, and U.S. commercial revenue grew 148% to $984 million, passing U.S. government revenue for the first time.

The focus is forward growth. U.S. commercial total contract value bookings were $1.463 billion, up 11%, compared with growth of 153% in the second quarter. Total commercial TCV bookings were $1.652 billion, up 17%.

Margins and Cash Flow Show Scale

Adjusted operating Margin was 62%, or $1.427 billion, and the Rule of 40 score reached 158%. Adjusted free cash flow was $1.216 billion, a 53% margin, and cash and Treasuries totaled $10.4 billion. Net dollar retention was 165%.

Total remaining deal value was $13.4 billion, up 55%, and U.S. commercial customer count reached 686, up 29%. International commercial revenue grew only 21% to $184 million.

Guidance Raise and Valuation Context

Fourth quarter revenue is guided to $2.649 billion to $2.653 billion. Full-year revenue guidance was raised to $8.530 billion to $8.534 billion, about 91% growth, with U.S. commercial revenue expected above $3.559 billion and adjusted free cash flow of $4.8 billion to $5.0 billion.

At $164.52, the shares trade about 23% below the 52-week high of $212.94 and about 55% above the 52-week low of $106.37. Market Capitalization is about $410.31 billion, with a forward price-to-earnings ratio of 84.31 and a trailing ratio of 124.71.

Contract Value and Bookings Trends in Focus

Management said sovereign AI Demand and pilot-to-production conversions are driving deal sizes. Investors will track whether U.S. commercial contract value growth re-accelerates from 11% and how fourth quarter guidance is met.