Palantir Technologies has achieved a significant milestone, reporting its first-ever $1 billion quarterly revenue. This achievement reflects Palantir's robust growth, particularly in its U.S. commercial sector, and its increasing success in securing large deals. Alongside this revenue landmark, the company has demonstrated an ability to navigate the volatile cryptocurrency market, as evidenced by the performance of its stock relative to Bitcoin.
The second quarter of 2025 saw Palantir's overall revenue reach $1.004 billion, a 48% increase year-over-year. This growth was fueled by a 68% surge in U.S. revenue, which totaled $733 million. The U.S. commercial sector was a standout performer, with revenue increasing by 93% to $306 million, while U.S. government revenue grew by 53% to $426 million. Palantir's success in closing large deals also contributed to its impressive results, with 157 deals worth at least $1 million, 66 deals worth at least $5 million, and 42 deals exceeding $10 million. The company's total contract value reached a record-setting $2.27 billion, up 140% year-over-year. Palantir's customer count also saw substantial growth, increasing by 43% year-over-year.
Palantir is increasing its margins at an impressive pace. In Q2 2025, Palantir's adjusted operating income was $464 million, up from $254 million in Q2 2024. Palantir's adjusted operating income growth has enabled it to expand its margins while simultaneously investing to grow AIP and its other U.S. operations.
Looking ahead, Palantir has raised its revenue guidance for the full year 2025 to between $4.142 billion and $4.150 billion. The company expects U.S. commercial revenue to exceed $1.302 billion, representing a growth rate of at least 85%. Adjusted income from operations is projected to be between $1.912 billion and $1.920 billion, with adjusted free cash flow expected to range from $1.8 billion to $2.0 billion. Palantir also anticipates GAAP operating income and net income in each quarter of 2025. For the third quarter of 2025, Palantir projects revenue between $1.083 billion and $1.087 billion, with adjusted income from operations between $493 million and $497 million.
While Palantir's overall performance has been strong, its valuation remains a topic of discussion. Trading at roughly 80 times projected next-year revenue, Palantir's valuation is higher than historic high-flyers like Tesla, Alphabet, or Salesforce. However, the company's strong profitability, with adjusted operating margins of 46%, and its "Rule of 40" score of 94, significantly outperforming tech industry norms, support its high valuation.
Palantir has demonstrated its ability to navigate the cryptocurrency market effectively. While some investors may have concerns about the company's valuation and potential volatility, Palantir's strong financial performance, strategic investments in AI, and growing commercial business position it for continued success. Investors should monitor growth sustainability, profitability metrics, and valuation as Palantir continues to expand.
