Palantir Technologies reported its strongest quarterly revenue growth since going public in 2020, with first-quarter 2026 revenue rising 85% year-over-year to $1.633 billion, well ahead of the $1.54 billion analyst consensus. Adjusted earnings per share of $0.33 beat the expected $0.28, and net income roughly quadrupled to $871 million, representing a 53% GAAP margin that few software companies at this scale have ever achieved.
The most striking element of the quarter was U.S. revenue growth of 104% year-over-year, the first time since the company’s direct listing that domestic growth has crossed the 100% threshold. U.S. government revenue alone grew 84% to $687 million as federal agencies dramatically expanded their use of Palantir’s AI platform, while U.S. commercial revenue grew 133% to $595 million, driven by strong enterprise demand for the company’s AIP product suite.
CEO Alex Karp, writing in the quarterly shareholder letter, declared that Palantir’s “Rule of 40 score has soared to 145%,” using the combined metric of revenue growth and adjusted operating margin that software investors use to assess business health. The company closed 206 deals worth at least $1 million in the quarter, with 72 exceeding $5 million and 47 crossing the $10 million threshold. Those deal volumes reflect a broadening customer base rather than reliance on a handful of large contracts.
Management raised full-year 2026 revenue guidance from an implied 61% growth rate to a 71% growth rate, projecting $7.65 billion to $7.66 billion in revenue. Second-quarter guidance of approximately $1.8 billion also topped the $1.68 billion consensus significantly. On the earnings call, Karp framed the moment as one where Palantir’s “financial results now demonstrate a level of strength that dwarfs the performance of essentially every software company in history at this scale.”
The counterargument is valuation. Palantir trades at a price-to-earnings ratio of around 150, leaving the stock with virtually no margin for error in execution. While the Motley Fool notes the impressive trajectory relative to Nvidia, some analysts remain cautious on the multiple relative to other high-growth software names. Whether that premium is justified will depend entirely on whether the 85% growth trajectory is repeatable, or whether this quarter represents a peak driven by short-term government spending tailwinds.
