PLTR: Another strong print—can the AI apps leader get back to ATH?

$Palantir Tech(PLTR.US) posted Q4 2025 results after the bell on Feb 2 ET. Overall, the print was strong with little to nitpick. Q4 growth re-accelerated, and leading indicators improved, easing concerns about whether the high growth that underpins its premium multiple can last.

That said, the after-hours move (up less than 7%) suggests a more measured market reaction vs. prior quarters. In the 2024–1H25 tape, this set-up might have delivered a 10%+ pop. What changed underneath?

First, the print:

1. U.S. remains the growth engine: Q4 U.S. revenue surged 93%, re-accelerating and pushing back against peak-fear.

(1) U.S. Gov.: landing big deals in a seasonally soft quarter

U.S. Gov. is Palantir's moat, and this quarter was driven by revenue recognition from prior awards, lifting growth to 60%. On Dec 10, Palantir secured a $448mn U.S. Navy award to co-launch ShipOS, applying Foundry and AIP in overseas operations. Early in the fiscal year is usually a soft procurement period as approvals take time, so demand often shifts out.

Resilience in a soft season supports Dolphin Research's prior view that procurement reforms are actually a tailwind for Palantir. We also think sustained budget support ties to its partner ecosystem, where industrial, construction, and defense contractors already embedded in Gov. programs jointly deliver integrated solutions.

(2) U.S. Commercial: consulting tie-ups to leverage client bases

U.S. commercial is Palantir's key growth driver and valuation anchor. Q4 U.S. commercial revenue re-accelerated to +137% YoY despite a tough base.

Partnerships with top consulting firms like KPMG and Accenture embed Palantir modules into broader solutions. These alliances also unlock their client relationships and channels.

2) Intl has a structural gap: strong Gov., weaker enterprise

Q4 Intl revenue leaned on Gov. demand (UK, UAE), while enterprise demand was slow but steady. As noted, protectionism, deep ties with the U.S. DoD, and operating environment constraints have dampened European corporates' willingness to sign.

3. Leading indicators look solid:

(1) Medium/long-term: TCV, RPO, customer adds

Q4 TCV rose 137% YoY to $4.26bn. U.S. commercial TCV grew 67.4% in Q4 but slowed QoQ, implying most new signings this quarter came from Gov.

RPO, which captures the non-cancellable portion of remaining contracts, jumped 144% in Q4. This signals clients are locking in larger, longer-term services, and given TCV, suggests many new Gov. contracts are fully committed, likely U.S. or trusted partners such as the UK.

Total customers net-added 43, including 5 Gov. departments and 38 enterprises, largely U.S. names. While net adds slowed QoQ, deal sizes and revenue recognition accelerated, indicating higher ARPU.

In SaaS, with no list price hikes, rising ARPU typically reflects superior product performance and stickier cohorts, prompting customers to expand their service bundles.

(2) Near term: watch Billings and NDR

Q4 Billings grew 91% YoY, with total contract liabilities (incl. customer prepayments) up nearly $80mn QoQ. Net dollar retention reached 139% and improved QoQ, aligning with stronger stickiness and upsell from existing customers.

4. Guidance topped: For Q1, revenue is guided up 73% YoY with OPM at 57%, roughly flat QoQ. For FY26, management guides to 60% growth with 57.5% OPM; if the usual conservative bias holds, actuals could come in stronger.

5. KPI snapshot

Dolphin Research view

Q4 shows Palantir entering a monetization acceleration phase with both new logo adds and existing-customer expansion. The quarter, forward indicators, and guidance all look good.

Since last earnings day, market cap has fallen from near 500bn to 380bn after-hours. Yet the last two quarters confirm fundamentals remain intact, so purely on the margin, this print would likely have cleared 10%+ in the 2024–1H25 backdrop, not just the ~8% move now.

The gap may reflect the lingering 'AI-native apps will disrupt traditional software' narrative since mid last year. Palantir benefits from AI but can be bucketed as a traditional app enhanced by AI, inviting peak-risk worries, while in our view its highly customized, deep vertical, relationship-heavy model is far less susceptible to disruption.

More tactically, investors can nitpick on slower QoQ TCV growth and net adds. Buy-side habitually expects 10–20% beats, and uncertainty around the durability of Gov. procurement growth, plus fewer incremental buyers after S&P 500 inclusion, can weigh on the stock near term.

Unless Palantir delivers an even bigger upside surprise, these concerns may linger. While the post-print reaction was muted, valuation is still rich on the updated guide: using FY26 guided OP of 4.1bn and a 10–20% beat bias implies $4.5–4.9bn EBIT.

At a 375bn after-hours market cap, that implies 76–79x EV/EBIT, or ~91x on guide alone. Sustaining the multiple likely requires keeping the current growth pace for another 2–3 years, which is a high bar.

Details below

I. Domestic still carries the growth flag

Q4 revenue reached $1.41bn (+70% YoY), beating cons. (~$1.33bn), with sequential acceleration. Palantir's custom software model adds near-term visibility, with tight guidance ranges implying high revenue certainty.

From two years of tracking, Dolphin Research finds management talks big but guides conservatively. That, in turn, may have raised buy-side expectations over time.

1) Segment details

(1) Gov.: U.S. accelerates

Gov. revenue grew 60% YoY, led by U.S. and accelerating QoQ. Intl Gov. growth slowed but remained high.

Intl Gov. rose 43%, likely reflecting revenue recognition from UK and Poland MoD awards signed earlier in the year. In Sept, via PwC UK, Palantir also joined a defense and public services framework with a total value up to £1.5bn.

(2) Commercial: U.S. booming, Intl steady

Commercial revenue grew 82% YoY, accelerating from a strong Q3. Within that, U.S. commercial surged 137% YoY, driven by new logo penetration and stronger stickiness.

Net dollar retention hit 139%, implying existing customers grew spend by 39% over the past 12 months. Intl commercial remained in high single digits, but customer count fell by 3 QoQ, reflecting budget constraints and concerns over Palantir's tight alignment with the U.S. DoD.

II. Leading indicators: back to an acceleration track

For software names, future growth drives valuation, while recognized revenue is lagging. Focus on new bookings, captured by RPO and TCV, in-period Billings, and customer adds.

Overall, some metrics slowed on a QoQ basis, which was fine a year ago, but looks more sensitive at today's multiple. Hence the nitpicking.

(1) RPO: sharp increase in long-dated, non-cancellable backlog

Q4 RPO jumped to $4.2bn, up nearly $1.6bn QoQ. This includes the $448mn Navy ShipOS award, a $310mn UK MoD add-on, and enterprise awards from 61 customers with $10mn+ orders.

(2) Billings & deferred revenue: healthy, with some slowing

Q4 Billings were nearly $1.5bn, up 91% YoY, aided by large contracts and cash collections. Contract liabilities (incl. prepayments) rose QoQ, and NDR improved to 139%, pointing to stronger stickiness and upgrades.

(3) TCV: seasonal swings, but healthy growth

Q4 TCV reached $4.26bn (+137% YoY), up $1.5bn QoQ and largely in step with RPO. This suggests most new contracts are fully committed, reflecting strong product acceptance.

(4) Customer adds: growth driven by U.S. enterprises

Customer count rose by a net 43 QoQ, including 38 commercial customers (mostly U.S.) and 5 Gov. departments. This mix underscores the centrality of U.S. enterprise demand.

III. Profitability keeps improving: pricing power + partner-leveraged channels

Q4 GAAP OP was $575mn, with notable deceleration in growth of S&M and G&A. GAAP OPM rose 7pts QoQ to 41%, and Adj. OPM (adding back D&A and SBC) reached 57%.

Palantir is people-intensive, but efficiency likely improved by co-selling with alliance partners and leveraging their mature channels. That helps lower required S&M spend.

Cash flow tracks cash collections on contracts, so seasonality can be pronounced. With significant new awards and payments in Q4, operating cash flow hit a new high.

Management guides FY cash flow at $3.9–4.1bn. On a 350bn market cap, EV/FCF of roughly 87.5x remains elevated.

Risk disclosure and disclaimer:Dolphin Research disclaimer and general disclosure