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Palantir misses on earnings, lowers revenue forecast

Yahoo Finance anchors discuss second-quarter earnings for Palantir.

Video Transcript

JULIE HYMAN: Here's another one that we're watching.

BRIAN SOZZI: Another one.

JULIE HYMAN: Exact same thing, Palantir is what I'm talking about here. The company missed on the bottom line and lowered its annual revenue forecast to below what analysts had been predicting. I'm looking also here at the forward P/E on this one, 67--

BRIAN SOZZI: Oh my gosh.

JULIE HYMAN: --for Palantir, at least according to--

BRIAN SOZZI: [INTERPOSING VOICES]--

JULIE HYMAN: --Bloomberg estimates.

BRIAN SOZZI: --come on.

[LAUGHTER]

JULIE HYMAN: I know, sorry. Sorry. So-- well, you made me you made me think of it. The company did say-- CEO Alex Karp said that 40% of its business is outside of the US. So some of this has to do with that stronger dollar. Some of it has to do with the business mix as well.

Palantir is known as a big government contractor, right? It's been trying to build up its commercial business. And that part actually is still the fasting growing-- fastest growing part of the business. But it's relatively small compared with the government piece.

BRAD SMITH: Yeah, absolutely. And their commercial customer count, at least here in the US, that increased 250% year over year. So they're adding more on customers. They had 34 customers in Q2 of 2021. That now sitting at 119 customers in Q2 of 2022. So adding on customers, but at the same time, you're looking across the value of those contracts and that's gonna be significant. At least as of this most recent quarter, they had closed about $792 million in total value of those contracts.

BRIAN SOZZI: I can't help but chuckle here. Citi analyst Tyler Radke is not even waiting for the earnings call. He's out right now, reiterating a sell rating on shares of Palantir. Dings them for slowing growth and revenue. I believe this quarter 26% sales growth, the prior quarter was 31% so that's slowing down. Also margins are starting to evaporate. So again, Citi wasting no time here, sell Palantir according to them.

BRAD SMITH: Yeah, $42 million lost in their operations there. That's a margin of negative-9% there. And there, you're taking a look at some of the revenue growth--

JULIE HYMAN: Across the different--

BRAD SMITH: Yeah.

JULIE HYMAN: --portions of the business.

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