Palantir's Q2 Revenue Soars to $1B, CEO Declares Skeptics 'Bent'
Palantir Technologies has announced a groundbreaking second quarter for 2025, shattering revenue expectations and marking its first-ever quarter exceeding $1 billion in sales. The AI-software company reported total revenue of $1.004 billion, representing a robust 48% year-over-year growth and a 14% sequential increase from the first quarter of 2025. This performance significantly outpaced Wall Street's anticipated revenue of approximately $937.45 million to $940 million.
The strong financial results were accompanied by confident remarks from CEO Alex Karp, who asserted that skeptics have been "bent into a kind of submission." Karp also reportedly challenged detractors with the phrase, "Tell the haters, read 'em and weep." In a letter to shareholders, Karp highlighted the "astonishing impact of AI leverage" and the radical acceleration of the company's growth rate.
Palantir's profitability metrics were equally impressive. The company achieved a GAAP net income of $326.7 million, a substantial increase from $214.0 million in Q1 2025 and $134.1 million in Q2 2024. Adjusted earnings per share (EPS) stood at $0.16, surpassing the forecasted $0.14. The adjusted operating margin reached a healthy 46%, and the company's "Rule of 40" score, a key indicator of growth and profitability, hit an exceptional 94% in Q2 2025, up from 83% in the previous quarter. Palantir also demonstrated strong cash generation, with cash flow from operations at $539 million and adjusted free cash flow at $569 million, ending the quarter with $6.0 billion in cash and no debt.
A significant driver of this quarter's success was the surging demand for Palantir's artificial intelligence platforms. The company's U.S. commercial revenue saw a remarkable 93% year-over-year increase, reaching $306 million. Overall U.S. revenue grew by 68% year-over-year, while U.S. government revenue also experienced strong growth, rising 53% year-over-year to $426 million.
Further cementing its position in the defense sector, Palantir secured a landmark $10 billion enterprise agreement (EA) from the U.S. Army on August 1, 2025. This decade-long contract is designed to consolidate 75 existing agreements into a single, streamlined deal, accelerating the delivery of commercial software and data integration, analytics, and AI tools to warfighters. The Army stated that this move would lead to "significant cost efficiencies across mission-critical programs" and ensure rapid access to cutting-edge technology. This deal is considered one of the largest Department of Defense contracts ever awarded to a software and data analysis company, solidifying Palantir's long-term role in military data processing and AI-assisted warfare.
Looking ahead, Palantir has raised its financial guidance for the upcoming quarters, signaling continued confidence in its growth trajectory. For Q3 2025, the company anticipates revenue between $1.083 billion and $1.087 billion. For the full fiscal year 2025, Palantir has increased its revenue guidance to a range of $4.142 billion to $4.150 billion, representing approximately 36% year-over-year growth and an increase from its prior guidance of $3.890 billion to $3.902 billion. The company also expects U.S. commercial revenue to exceed $1.302 billion for the full year, a growth rate of at least 85%, and projects adjusted free cash flow between $1.8 billion and $2.0 billion.
This impressive quarter, underscored by the significant U.S. Army contract and robust commercial growth, positions Palantir as a formidable player in the evolving AI software landscape, silencing doubters and reinforcing its market presence.