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Palantir Q3 Revenue Jumps 96%, but New Contract Value Grew Just 6%
KEY POINTS
- Palantir reported third-quarter revenue of $2.313 billion on Nov. 2, up 96% from a year earlier and about 7% above the top of its guided range.
- Palantir raised its 2026 revenue guide to $8.530 billion to $8.534 billion, roughly 91% growth, and guided fourth-quarter revenue to about $2.65 billion.
- Total contract value rose just 6% to $2.918 billion, and at $178.34 the stock trades near 33x analysts’ pre-report 2027 sales estimate.
Palantir Technologies Inc. (PLTR) reported third-quarter results after the close on Nov. 2, and the headline number is hard to argue with. Revenue came in at $2.313 billion, up 96% from a year earlier and about 7% above the top of the company’s own forecast range. Palantir also raised its full-year 2026 revenue guide to $8.530 billion to $8.534 billion, or roughly 91% growth, according to the earnings call transcript.
That should be the whole story, but it isn’t. One line in the report grew at a fraction of that pace: total contract value, the dollar amount of deals signed in the quarter, rose just 6% to $2.918 billion. With the stock at $178.34 at the Nov. 2 close, the gap between those two growth rates is what I want to work through, along with what the price already assumes.
Revenue Cleared the Top of Guidance by 6.9%
Palantir had guided third-quarter revenue to $2.160 billion to $2.164 billion. It delivered $2.313 billion, which is 6.9% above the top of that range and the tenth straight quarter it has beaten its own forecast. Adjusted earnings were $0.44 a share, against the $0.41 analysts expected, according to Fortune.
Profit kept pace. Adjusted operating income was $1.427 billion, a 62% margin, while GAAP operating income was $1.085 billion (47%) and GAAP net income was $1.128 billion. Adjusted free cash flow came to $1.216 billion, and Palantir ended the quarter with $10.4 billion in cash and U.S. Treasuries.
Now look at the chart below. Each of the last four quarters landed between 5.7% and 7.4% above the top of the guided range, so a beat of roughly 7% is the baseline at this point. The point is, when a 7% beat is what everyone expects, a 7% beat isn’t news by itself.
That makes the mix underneath the total more useful than the total itself.
U.S. Commercial Sales Passed Government Sales for the First Time
U.S. commercial revenue hit $984 million, up 148% from a year ago and 29% from the second quarter, and it topped U.S. government revenue for the first time. U.S. government revenue was $953 million, up 96%.
| Segment | Q3 2026 revenue | Growth vs. year ago |
|---|---|---|
| U.S. commercial | $984 million | +148% |
| U.S. government | $953 million | +96% |
| International commercial | $184 million | +21% |
| International government | $192 million | +31% |
| Total | $2.313 billion | +96% |
Customer numbers explain how. Palantir counted 686 U.S. commercial customers, up 29% from a year ago, while net dollar retention rose to 165%, up 800 basis points from the prior quarter. In other words, revenue grew 148% on 29% more customers, so the ones already on board are spending a lot more. CFO Dave Glazer said on the call that demand for its sovereign AI offering, which lets customers keep their data under their own control, is speeding up U.S. commercial momentum, per the transcript. And CEO Alex Karp called the 96% growth rate “absolutely striking” in his quarterly letter, as Fortune reported.
International is the soft spot again. It brought in $376 million combined, only about 16% of revenue, and it is growing at a fraction of the U.S. pace. Now, what Palantir expects from here is where the numbers get interesting.
I walked through the setup going into this report, including how big a beat Palantir needed and why a price this high leaves little cushion. If you want the context behind what you just read, here is the video.
Fourth-Quarter Guide Points to 88% Growth Again
Palantir guided fourth-quarter revenue to $2.649 billion to $2.653 billion. Against $1.407 billion a year ago, that is about 88% growth at the midpoint, or 14.6% above the third quarter. For the full year, it guided adjusted operating income to $5.245 billion to $5.249 billion, adjusted free cash flow to $4.8 billion to $5.0 billion, and U.S. commercial revenue to more than $3.559 billion, up at least 143% (transcript).
That last number is worth a minute. U.S. commercial has brought in about $2.343 billion through nine months, so the guide needs at least $1.216 billion in the fourth quarter, roughly 24% more than the third. That is close to the 29% it just delivered, so it doesn’t look like a stretch.
Palantir also tends to guide low, as the chart above shows. Here is what 2026 looks like if the fourth quarter repeats that pattern.
| Fourth-quarter result | Q4 revenue | 2026 revenue | 2026 growth |
|---|---|---|---|
| At guide midpoint | $2.651 billion | $8.532 billion | +90.7% |
| 3.5% above midpoint | $2.744 billion | $8.625 billion | +92.7% |
| 7% above midpoint | $2.837 billion | $8.718 billion | +94.8% |
Those are illustrations built on last year’s $4.475 billion of revenue, not forecasts. But even the high case adds only about four points to the full-year growth rate, which tells you how much of 2026 is already in the bag. The open question is what feeds 2027, and that is where the report gets less comfortable.
Bear Case: Contract Value Grew 6% While Sales Nearly Doubled
Total contract value of $2.918 billion rose only 6% from a year ago. U.S. commercial contract value rose 11% to $1.463 billion. Remaining deal value, the work signed but not yet turned into revenue, reached $13.4 billion, up 55% from a year earlier and just 2% from the second quarter. A quarter earlier it had been growing 83% from a year before. Remaining performance obligations, the part customers are contractually bound to pay, were $4.9 billion, up 88% but flat from the prior quarter.
Management’s explanation was shorter contracts. Glazer said Palantir signed multiple eight-figure deals in the quarter that ran shorter than usual, and he tied the flat obligations figure to how government contracts are structured, according to the transcript. To be fair, a shorter deal shows up as a smaller contract value even when the customer spends the same amount each year, so this may say more about deal length than demand.
The counterweight is real, too. U.S. commercial contract value over the last twelve months is $6.114 billion, up 62%, and U.S. commercial remaining deal value is up 79%. Palantir also has the cushion to wait it out, with $10.4 billion in cash and Treasuries and $1.216 billion of adjusted free cash flow in this quarter alone. Glazer also noted that the sovereign AI push is only a quarter old, so he expects contract size and length to grow.
The one concern that matters is 2027. Next year’s revenue comes out of work signed this year, and remaining deal value growth has already slowed from 83% to 55% in one quarter. It doesn’t change what Palantir earns in 2026, since that revenue and cash are essentially in hand. It does change how much of today’s price rests on next year.
What a $178 Share Price Already Assumes About 2027 Sales
Palantir closed at $178.34 on Nov. 2, down 3.1% on the day. That is 14.7% below the $209.05 closing high on Oct. 9, and 41.9% above the $125.65 close on Aug. 3, the day it reported the second quarter. The report also landed during a broader AI-related selloff, with the Nasdaq down more than 1% on Monday and about 4% over five days, Fortune noted, so the stock has more than Palantir’s own numbers pushing it around.
With about 2.30 billion shares outstanding, $178.34 works out to a market value near $410 billion, or about 48x the $8.532 billion midpoint of 2026 guidance. Analysts’ average 2027 revenue estimate, taken before this report, was $12.39 billion, which puts the stock at about 33x that figure.
So what happens if that multiple shrinks while the business does exactly what analysts expect? Here is the math on the same $12.39 billion.
| Price-to-sales on 2027 estimate | Implied market value | Implied share price | vs. $178.34 |
|---|---|---|---|
| 25x | $310 billion | $134.68 | -24.5% |
| 30x | $372 billion | $161.61 | -9.4% |
| 33.1x (today) | $410 billion | $178.34 | 0% |
| 40x | $496 billion | $215.48 | +20.8% |
These are illustrations on a single pre-report estimate, not price targets. They show how sensitive the stock is. Moving from 33x to 30x sales on the same revenue takes about 9% off the price, and the business wouldn’t have changed at all. For reference, Wall Street’s average price target was about $212.50 heading into the report, which sits close to the 40x row.
What to Watch Between Now and the February Report
Three things will tell you more than the next beat. First, whether total contract value growth climbs back toward revenue growth, since 6% can’t support 90% for long. Second, whether remaining deal value growth steadies after dropping from 83% to 55%. Third, how Palantir opens its 2027 revenue guide with the fourth-quarter report in February.
A guide well above the analysts’ $12.4 billion would shrink the multiple without the stock moving at all, while a guide below it would do the opposite. Strong quarter, one open question. The next two reports should answer it.
This article is for informational and educational purposes only. It is not financial, investment, tax or legal advice, and it is not a recommendation to buy, sell or hold any security. I am not a registered investment advisor, so consult a licensed professional before investing. On the date of publication, I did not have any direct or indirect position in any of the securities mentioned in this article. Investing involves risk, including the possible loss of principal, and past performance does not guarantee future results. Analyst estimates, price targets and the valuation scenarios in this article are illustrations based on assumptions, not predictions, and actual results may differ materially. Market data pulled November 3, 2026. Figures may be delayed or contain errors and change quickly, so verify current numbers before acting. Analyst ratings and other third-party views are reported as news and are not endorsed by me. Information may have changed since publication.
