Palantir Q3 2025 Earnings: Commercial Growth Drives Record Profitability

Palantir Technologies, known for its powerful data analytics software, just released its financial results for the third quarter of 2025, and a dive into their latest 10-Q filing reveals a company hitting a powerful stride. Let's break down the income statement to see what's driving this impressive performance.

Explosive Growth in Revenue

Palantir posted staggering top-line growth, with total revenue for the third quarter reaching $1.18 billion, a massive 63% increase from the $726 million reported in the same period last year. This growth wasn't just a fluke; it was broad-based, with both of the company's major segments firing on all cylinders.

• Government Segment: The company's traditional stronghold, which serves U.S. and international government agencies, grew an impressive 55% year-over-year to $633 million.
• Commercial Segment: This segment, serving corporate clients, was the star of the show. It surged by 73% to $548 million, demonstrating that Palantir's push to expand its footprint in the private sector is paying off handsomely. The rapid expansion of the commercial business is a key indicator of the company's diversifying revenue base.

From Top Line to Bottom Line

Strong revenue is one thing, but converting it into profit is what truly signals a healthy, scaling business. The following flow diagram provides a visual breakdown of Palantir's income statement for the third quarter, illustrating how revenue cascades through costs and expenses to arrive at net income.

As the chart shows, Palantir's profitability saw a dramatic improvement. The company's gross profit hit $974 million, maintaining a robust gross margin of 82%. Even more telling was the leap in operating income.

After accounting for operating expenses—which include sales, marketing, and R&D—Palantir's income from operations more than tripled, jumping to $393 million from $113 million in Q3 2024. This demonstrates significant operating leverage: as revenue grows, a larger portion of each dollar is falling to the bottom line. The operating margin expanded from 16% to 33% year-over-year.

Ultimately, this resulted in net income attributable to common stockholders of $476 million, or $0.18 per diluted share. This is a threefold increase from the $144 million, or $0.06 per share, reported in the prior year's quarter.

Financial Fortitude

A glance at the balance sheet confirms Palantir's strong financial position. The company ended the quarter with a formidable war chest of $6.4 billion in cash, cash equivalents, and marketable securities.

Furthermore, cash flow from operations for the first nine months of the year was $1.36 billion, nearly double the $694 million generated during the same period in 2024. This indicates that the company's growth is not just on paper—it's backed by a strong inflow of actual cash.

Looking Ahead

Palantir's third-quarter results paint a picture of a company in a phase of accelerated, and increasingly profitable, growth. The rapid expansion of its commercial segment alongside the steady performance of its government business suggests its strategy is working. While the company operates in a competitive landscape and faces inherent risks, such as the long and unpredictable sales cycles noted in its filing, this quarter's powerful financial performance provides a solid foundation to build upon.