A quarter with nothing to fix on the surface
Start with the part that is simply strong. Palantir's third-quarter revenue was $2.313 billion, up 96% from a year earlier and 20% from the second quarter, and above both the $2.18 billion FactSet consensus and the $2.160–$2.164 billion the company itself guided to in August. US revenue rose 119% to $1.937 billion. Inside that, US commercial revenue rose 148% to $984 million and passed US government revenue, $953 million, for the first time in the company's history. For years, Palantir's government business dominated the perception of the company. This quarter marks an important shift: US commercial revenue narrowly exceeded US government revenue for the first time. Whether that becomes a sustained change in the business mix will depend on subsequent quarters.
The guidance moved the same way. Fourth-quarter revenue is guided to $2.649–$2.653 billion, and the full-year revenue range was raised to $8.530–$8.534 billion, from $8.150–$8.158 billion previously. US commercial revenue for the year is now expected to exceed $3.559 billion, growth of at least 143%.
The line that did not double
Against that sits one slow figure, and it is the figure that describes the future rather than the present. Total contract value closed in the quarter was $2.918 billion, up 6% year over year. US commercial contract value closed was $1.463 billion, up 11%. Revenue recognized during the quarter nearly doubled year over year. By contrast, the potential lifetime value of contracts closed during the period increased just 6%. These are different measures and do not move in lockstep, but the divergence is worth watching: Palantir's reported revenue growth is running substantially ahead of growth in newly closed contract value.
The remaining-deal-value figure offers a different view. US commercial RDV, the remaining value of signed US commercial contracts under Palantir's definition, stood at $6.517 billion at the end of September. That was up 79% year over year but only 4% from June. The annual comparison shows a substantially larger pool of remaining contract value than a year ago; the sequential comparison shows that the reported balance increased relatively little during Q3. RDV is not a direct measure of new bookings or revenue waiting to be recognized, so the 4% figure should not be treated as a standalone measure of backlog replenishment.
Palantir's own definitions make the slow line harder to dismiss, not easier. In the release, contract value is the total potential lifetime value of contracts at signing, and the company states that its TCV and RDV figures presume the exercise of all contract options available to customers and no termination of contracts, while also noting that the majority of its contracts are subject to termination for convenience. In other words, Palantir's TCV measure includes options customers have not yet exercised, while the company also says the majority of its contracts can be terminated for convenience. The reported 6% growth therefore describes potential contract value closed under Palantir's definition, not a guaranteed increase in future revenue. Even using that definition, TCV growth was considerably slower than the 96% increase in recognized revenue.
Deal count was busy: 212 deals of at least $1 million closed in the quarter, 64 of them at $10 million or more. But count and value point in different directions, and value is the one that turns into next year's revenue.
Profit, with one asterisk worth reading
The profitability is real under standard accounting, which is not always true of fast-growing software companies. GAAP operating income was $1.085 billion, a 47% margin. Net income was $1.128 billion. Cash from operations was $1.205 billion, and the company ended September with $10.4 billion in cash, equivalents and US Treasury securities.
The asterisk is the distance between that 47% and the 62% adjusted operating margin in the headline. The adjusted figure excludes stock-based compensation of $318.9 million in the quarter, plus $23.1 million of related employer payroll taxes. Stock pay is a real cost carried by shareholders through dilution, even though no cash leaves the company. Readers quoting the 62% should know which expenses were removed to reach it. This is a profitable company presenting its most flattering margin first, which is a different thing from a company that needs the adjustment to look profitable.
What the next two quarters have to show
For enterprise software buyers, this print provides evidence that Palantir's US commercial business is growing rapidly and generating substantial recognized revenue. But the reported segment figures do not isolate how much of that growth comes specifically from AI-related spending. The distinction matters: strong commercial growth is established by the results; the precise contribution of enterprise AI budgets is not.
For anyone pricing the company, the question is whether contract growth can eventually catch up with revenue growth. Fourth-quarter guidance implies another substantial sequential increase in revenue. Meanwhile, total contract value closed grew only 6% year over year, and US commercial RDV increased 4% sequentially. These figures do not prove that Palantir is running short of future work, but they create a meaningful question about the pace at which new contract value is being added relative to recognized revenue. The next results should show whether TCV growth accelerates and whether the remaining-value balance continues expanding.
Sources
- [1] Palantir Technologies Inc. — "Palantir Reports Q3 2026 U.S. Comm Revenue Growth of 148% Y/Y and Revenue Growth of 96% Y/Y; Raises FY 2026 Revenue Guidance to 91% Y/Y Growth and U.S. Comm Revenue Guidance to 143% Y/Y," press release via Business Wire, November 2, 2026 (revenue $2.313 billion, up 96% year over year and 20% quarter over quarter, the first quarter above $2 billion; U.S. revenue $1.937 billion, up 119%; U.S. commercial revenue $984 million, up 148% year over year and 29% sequentially, passing U.S. government revenue of $953 million, up 96%, for the first time; closed 212 deals of at least $1 million, 107 of at least $5 million and 64 of at least $10 million; total contract value closed of $2.918 billion, up 6% year over year; U.S. commercial TCV closed of $1.463 billion, up 11%; U.S. commercial remaining deal value of $6.517 billion, up 79% year over year and 4% quarter over quarter; GAAP income from operations of $1.085 billion, a 47% margin; adjusted income from operations of $1.427 billion, a 62% margin; GAAP net income of $1.128 billion; GAAP and adjusted diluted EPS of $0.44; stock-based compensation of $318.889 million and related employer payroll taxes of $23.106 million in the quarter; cash from operations of $1.205 billion; adjusted free cash flow of $1.216 billion, 53% of revenue; cash, cash equivalents and U.S. Treasury securities of $10.4 billion; Q4 2026 revenue guidance of $2.649–$2.653 billion; full-year 2026 revenue guidance raised to $8.530–$8.534 billion, U.S. commercial revenue guidance raised to more than $3.559 billion and adjusted free cash flow guidance raised to $4.8–$5.0 billion; TCV, ACV and RDV each defined as presuming the exercise of all contract options available to customers and no termination of contracts, while the majority of contracts are subject to termination provisions, including for convenience; read first-hand in full, via syndication)Read source
- [2] Dow Jones Newswires via Morningstar — "Palantir 3Q Profit Up, Lifts Outlook as U.S. Commercial Revenue Overtakes Government Business," November 2, 2026 (FactSet consensus of $2.18 billion revenue and $0.41 adjusted EPS; net income $1.13 billion; full-year guidance raised from $8.150–$8.158 billion)Read source
- [3] AI Stock Wire — "Palantir (PLTR) Q3: U.S. commercial revenue tops government," November 2, 2026 (Q3 result against the company's own August guidance of $2.160–$2.164 billion revenue and $1.292–$1.296 billion adjusted operating income; prior full-year guidance range of $8.150–$8.158 billion — both ranges checked against Palantir's Q2 2026 earnings release, Exhibit 99.1 to its August 3, 2026 Form 8-K)Read source