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Palantir shares climbed as much as 9 per cent on Monday as the data intelligence group reported a surge in revenue driven by rapid growth in its US government contracts and American businesses embracing AI.
Strong fourth-quarter revenue of $1.4bn pushed its sales for 2025 up 56 per cent year on year to $4.5bn, beating Wall Street expectations of $4.4bn. Profits for the full year more than trebled to $1.6bn.
The Denver, Colorado-based company said it expected revenue to grow 61 per cent this year to $7.2bn, surpassing analysts’ expectations.
Chief executive Alex Karp cited rapid growth in the US, saying the company’s performance has been “driven by an increasingly discerning set of companies and institutions in the United States that understand the value of artificial intelligence”.
Karp told investors that there was a “real hesitance” among European customers to adopt the company’s tools, adding that non-US customers had shown a preference for homegrown products.
US commercial revenue grew 137 per cent in the fourth quarter from the year before, while government contracts rose 66 per cent. Clients outside the US accounted for 23 per cent of sales, down from 33 per cent the previous year.
Palantir, which relies on government contracts for the bulk of its US revenues, has been criticised for its work supporting the Trump administration’s push for mass deportations.
The company’s tools are deployed by federal agencies, including Immigration and Customs Enforcement, to help digest large data sets and aid officials in making operational decisions.
The company has received $81mn in contracts from ICE since January 2025, according to FT analysis of government documents. This included a $30mn deal sealed in April last year to create a system to streamline the “selection and apprehension operations of illegal aliens”.
Palantir has held contracts with the agency for more than a decade under successive US administrations, including those of Barack Obama and Joe Biden.
Karp has previously defended Palantir’s work for US government agencies, arguing it has helped America defend its borders. He told investors Palantir had supported “in [a] critical manner some of the most interesting, intricate, unusual operations, that the US government has been involved in, many of which we can’t comment on”.
This work was “the highlight of last year and . . . highly motivating to all of us at Palantir”, he added.
In his letter to shareholders accompanying earnings, Karp said the company’s software was capable of preventing terror attacks and also “preventing an unconstitutional intrusion into the private lives of citizens by the state”.
The company signed a $448mn deal with the US Navy in December to develop “ShipOS”, an operating system intended to aid the development of modern warships. In July, it inked a $10bn decade-long deal with the US Army that consolidated dozens of pre-existing agreements with contractors into a single contract.
Palantir shares rallied in after-market trading in New York. The stock had slipped 16 per cent since the start of the year ahead of Monday’s earnings report, dragged down alongside software peers amid investor jitters around the sustainability of an AI boom.
Net income in the fourth quarter rose to $609mn, far ahead of analysts’ forecasts of $461mn. Karp said the results were a “cosmic reward of sorts” for shareholders that had backed an “idiosyncratic project”.
