Palantir Technologies on Monday reported June-quarter earnings that missed views while revenue edged by Wall Street targets. PLTR stock tumbled as revenue guidance came in below expectations amid slowing government growth.
Denver-based Palantir reported second-quarter earnings before the market open. Palantir stock tumbled 14.2% to close at 9.82 on the stock market today.
Revenue guidance for Palantir stock disappointed.
Palantir Stock: U.S. Government Spending
"The tone of the (Palantir earnings) call was muted with Palantir frustrated with the push out of large U.S. government programs and the negative impact this delay is expected to have on the company's financial performance in the second half of the year," said Brian White, analyst at Monness, Crespi and Hardt. "Outside of this setback, the company sounded upbeat about U.S. commercial trends. Also, the company remains committed to its ambitious hiring program this year."
In the Palantir earnings report for the three months ending June 30, the software maker said it lost one cent per share on an adjusted basis. Results included the negative impact of $135.8 million in non-operating items, largely related to unrealized losses from investments.
Also, revenue rose 26% to $473 million, the maker of data analytics software said.
Meanwhile, analysts expected Palantir earnings of 3 cents a share on revenue of $469.1 million.
In the June quarter, commercial revenue rose 46% to $210 million while government revenue climbed 13% to $263 million, the company said. Analysts had estimated government revenue of $269 million and commercial revenue of $201 million.
PLTR Stock: Revenue Outlook Misses
For the current quarter ending in September, Palantir forecast revenue of $474.5 million at the midpoint of guidance. Analysts polled by FactSet had projected third-quarter revenue of $503 million.
"Under current macro conditions and performance trends, we think it will be challenging for PLTR stock to achieve its goal of 30%-plus sales growth for the next three years," said CFRA Research analyst Janice Quek in a report.
PLTR stock has retreated some 37% in 2022, but had rallied significantly from a low of 6.44 on May 12.
Heading into the Palantir earnings report, the software stock had a Relative Strength Rating of only 25 out of a best-possible 99, according to IBD Stock Checkup.
Government agencies use Palantir software for intelligence gathering, counterterrorism and military purposes. In addition, the software maker aims to expand into the health care, energy and manufacturing sectors.
Palantir Stock: SPACs Boost Revenue
To boost revenue, Palantir had invested in special purpose acquisition companies, or SPACs. The SPACs raise money in an initial public offering with the purpose of acquiring a company or companies.
In addition, the SPACs sign multiyear contracts to use Palantir software in their core operations.
"The revenue contribution from SPACs this Q was approximately $32 million," said Jefferies analyst Brent Thill in a report. "It's expected to level off at around $30 million per quarter over the next several quarters, which implies 7% total revenue mix of our updated fiscal 2022 estimates."
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
