Palantir expects quarterly revenue above estimates on strong AI demand

Nov 2 (Reuters) - Palantir Technologies ‌forecast revenue above ​estimates ​for the last three months of the year after topping third-quarter expectations, banking on sustained demand for its data-analytics software from ‌the US government and commercial clients.

The company expects fourth-quarter revenue ⁠to be between $2.649 billion and $2.653 billion, it said on Monday, above analysts' average estimate of $2.46 ‌billion.

Revenue from commercial clients ‌surpassed government revenue in the US for the first time in the third quarter, driven by the rapid adoption of AI software to improve ​operations and safeguard sensitive data.

Palantir, which develops the Maven Smart System used by NATO's military headquarters and several European armed forces, has built ⁠its business around government and defense contracts.

Total revenue in the third quarter jumped about 96% to $2.31 ​billion, the second straight quarter of 90% growth. Analysts had estimated $2.18 billion, according to data compiled by LSEG.

"We have now ​essentially doubled our entire business since the ‌same quarter last year," CEO Alex Karp said in a letter to shareholders.

Palantir's US commercial revenue grew by 148% ⁠to $984 million, while US government revenue increased by 96% to $953 million during the period.

The company's shares were last up nearly 1% in volatile extended trading.

"Like all AI ⁠names, Palantir came into earnings priced to perfection, hence the pullback off the beat. ​Elevated expectations seem to be the main factor holding back this recent high flyer," said Ryan Lee, senior vice president of product and strategy at Direxion.

Palantir has a ‌12-month forward price-to-earnings ratio of 83.38, compared with Snowflake's 109.05 and Datadog's 80.16.

The company reported a total of 1,090 ‌customers in the trailing 12-month period ending September 30, with 904 classified as ⁠commercial.

Palantir also raised its annual ‌revenue expectations to between $8.530 ​billion and $8.534 billion, up from its prior estimates of between $8.150 billion and $8.158 billion.

(Reporting by Jaspreet Singh in Bengaluru; Editing by ‌Sriraj Kalluvila)

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