10-K – 2026-02-17 – pltr-20251231.htm

General Risk Factors
Adverse economic conditions or reduced technology spending may adversely impact our business.
Our business depends on the economic health of our current and prospective customers and overall demand for technology. In addition, the purchase of our platforms and services is often discretionary and typically involves a significant commitment of capital and other resources. In recent years, the United States, the EU, and the U.K. have experienced historically high levels of inflation. Although inflation levels have decreased from their highest levels in the United States, the EU, and the U.K., the U.S. Federal Reserve, the European Central Bank, and the Bank of England have raised, and could maintain or raise, interest rates and implement fiscal policy interventions. Even if these interventions lower inflation, they may also reduce economic growth rates, create a recession, and have other similar effects. Downturns in macroeconomic conditions, including fluctuating interest rates; supply chain disruptions; global political and economic uncertainty; geopolitical tensions, such as the ongoing Russia-Ukraine conflict, and the conflict resulting from Hamas’ attack on Israel and ongoing conflict in the Middle East; a lack of availability of credit; a reduction in business confidence and activity; the curtailment of government or corporate spending; public health concerns or emergencies; financial market volatility; the potential or actual imposition of tariffs or other impacts on trade relations; and other factors have in the past, and may in the future, negatively affect the industries to which we sell our platforms and services. Our customers may suffer from reduced operating budgets, which could cause them to defer, reduce, or forego purchases of our platforms or services. Moreover, competitors may respond to market conditions by lowering prices and attempting to lure away our customers, and the increased pace of consolidation in certain industries may result in reduced overall spending on our offerings. Uncertainty about global and regional economic conditions, a downturn in the technology sector or any sectors in which our customers operate, or a reduction in information technology spending even if economic conditions are stable, could adversely impact our business, financial condition, and results of operations in a number of ways, including longer sales cycles, extended or alternative payment terms or delayed payments from our customers, lower prices for our platforms and services, material default rates among our customers, contract terminations or renegotiations by our customers, reduced sales of our platforms or services, difficulty attracting new customers or retaining and expanding relationships with existing customers, and lower or no growth. For example, some of our early-stage Investee customers filed for bankruptcy or terminated their contracts with us and we may not realize the full value of our commercial contracts with such customers as a result.
We cannot predict the timing, strength, or duration of any crises, economic slowdown or any subsequent recovery generally, or for any industry in particular. Although certain aspects of the effects of a crisis or an economic slowdown may provide potential new opportunities for our business, we cannot guarantee that the net impact of any such events will not be materially negative. Accordingly, if the conditions in the general economy and the markets in which we operate worsen from present levels, our business, financial condition, and results of operations could be adversely affected.
Moreover, to the extent challenging macroeconomic conditions adversely affect our business, financial condition, and results of operations, these events, alone or in combination, may also have the effect of heightening many of the other risks described in this “Risk Factors” section, including but not limited to, those related to maintaining company culture, our ability to increase sales to existing and new customers, continue to perform on existing contracts, develop and deploy new technologies, expand our marketing capabilities and sales organization, and generate sufficient cash flow to service our indebtedness, volatility in the trading price of our Class A common stock, and our ability to comply with the covenants in the agreements that govern our indebtedness.
We may face exposure to foreign currency exchange rate fluctuations.
Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro, Japanese yen (“JPY”), and British pound sterling (“GBP”). We expect our non-U.S. operations to continue to grow in the near term and we are continually monitoring our foreign currency exposure to determine if we should consider a hedging program. Today, our non-U.S. contracts are denominated in either U.S. dollars or local currency, while our non-U.S. operating expenses are often denominated in local currencies. However, as we expand our non-U.S. operations, a larger portion of our operating expenses may be denominated in local currencies and we may also hold monetary assets and liabilities in currencies other than the respective subsidiaries’ functional currency. Volatility in exchange rates and global financial markets is expected to continue due to political and economic uncertainty globally.
When the U.S. dollar strengthens compared to other currencies, it generally increases the real cost of our platforms to our customers outside of the United States, which could reduce demand for our platforms and adversely affect our financial condition and results of operations. Fluctuations in the value of foreign currencies have resulted, and could continue to result, in the dollar equivalent of our revenues being lower, result in increased expenses for our non-U.S. operations, or otherwise impact our financial condition and results of operations.
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Natural disasters, including climate change, and other catastrophic events beyond our control could harm our business.
Natural disasters, including climate change, or other catastrophic events may cause damage or disruption to our operations, non-U.S. commerce and the global economy, and thus could have a negative effect on us. Our business operations have been, and could in the future be, subject to interruption by natural disasters, earthquakes, flooding, fire, power shortages, pandemics, terrorism, such as Hamas’ attack against Israel in 2023 and the ensuing conflict, political unrest, cyberattacks including as may be exacerbated by the ongoing Russia-Ukraine and Middle East conflicts, geopolitical tensions including those related to the invasion of Ukraine, the effects of climate change such as drought, wildfires, increased storm severity, and sea level rise, telecommunications failure, vandalism, and other events beyond our control. Although we maintain crisis management and disaster response plans, such events could make it difficult or impossible for us to deliver our services to our customers, could decrease demand for our services, could make existing customers unable or unwilling to fulfill their contractual requirements to us, including their payment obligations, and could cause us to incur substantial expense, including expenses or liabilities arising from potential litigation. Our insurance may not be sufficient to cover losses or additional expense that we may sustain. Customer data could be lost, significant recovery time could be required to resume operations and our financial condition and results of operations could be adversely affected in the event of a major natural disaster or catastrophic event.
In addition, the impacts of climate change on the global economy and our industry are rapidly evolving. We have been, and may continue to be, subject to increased regulations, reporting requirements, standards or expectations regarding the environmental impacts of our business. While we seek to mitigate our business risks associated with climate change, there are inherent climate-related risks wherever business is conducted. Any of our primary locations may be vulnerable to the adverse effects of climate change. For example, our Colorado headquarters has experienced climate-related events and may continue to at an increasing frequency in the future, including drought, water scarcity, heat waves, and wildfires resulting in air quality impacts and power shutoffs. Additionally, while many of our employees have returned to our offices, it could be particularly difficult to mitigate the impact of these events on our employees continuing to work remotely. Changing market dynamics, global policy developments and increasing frequency and impact of extreme weather events on critical infrastructure in the United States and elsewhere have the potential to disrupt our business, the business of our partners, suppliers, and customers, and may cause us to experience higher attrition, losses and additional costs to maintain or resume operations.
If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of the Nasdaq listing standards. The requirements of these rules and regulations may continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming, and costly, and place significant strain on our personnel, systems, and resources.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We have developed and refined our financial reporting and other disclosure controls and procedures, and will continue to do so. Our controls are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers. We are also continuing to improve our internal control over financial reporting as our business continues to grow in size and complexity. We expect to continue to hire and integrate additional accounting and financial staff with appropriate company experience and technical accounting knowledge, as well as implement and integrate new technological systems. In order to maintain and improve the effectiveness of our financial statement and disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight.
Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, we have identified in the past, and may identify in the future, deficiencies in our controls. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which could have a negative effect on the trading price of our Class A common stock. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq. We are required to annually comply with the SEC rules that implement Section 404 of the Sarbanes-Oxley Act and are therefore required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose.
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Our independent registered public accounting firm must also formally attest to the effectiveness of our internal control over financial reporting annually. Any failure to maintain effective disclosure controls and internal control over financial reporting could have an adverse effect on our business, financial condition and results of operations and could cause a decline in the market price of our Class A common stock.
We incur significant costs and demands upon management as a result of complying with the laws and regulations affecting public companies which could adversely affect our business, financial condition, and results of operations.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and the rules and regulations of Nasdaq. These requirements result in significant legal, accounting, and financial compliance costs and have made, and will continue to make, some activities more time-consuming and costly. For example, the Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations. As a result of the complexity involved in complying with the rules and regulations applicable to public companies, our management’s attention may be diverted from the day-to-day management of our business, which could harm our business, financial condition, and results of operations.
In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time-consuming. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We have and intend to continue to invest substantial resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from business operations to compliance activities. If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed.
These rules and regulations have also made it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to maintain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our Board of Directors or as our executive officers.

ITEM 1B. UNRESOLVED STAFF COMMENTS
None.

ITEM 1C. CYBERSECURITY
Risk Management and Strategy
We maintain a security organization that is responsible for overseeing security practices across the Company, including with respect to information, personnel, and facilities. Our information security team maintains policies and processes for assessing, identifying, and managing material risk from cybersecurity and other information security threats, including as may be related to our third party vendors and suppliers.
Our Chief Information Security Officer leads our information security team and works with Palantir’s other departments in areas such as facilities, physical security, operations, data protection, information technology, product development, finance, legal and compliance, where necessary in assessing and reviewing risks and identifying actions to be taken. As part of our overall approach to risk management, we monitor and evaluate the sufficiency of our policies, processes and controls, including with respect to cybersecurity risks and process.
Regular assessments and reviews, both internal and independent, are conducted on Palantir information assets and networks, including systems, devices, applications, and related computing resources, to evaluate potential risks and vulnerabilities, identify actions to be taken, and evaluate the effectiveness of our cybersecurity program and controls. Risk management exercises occur regularly, and in response to changes in Company operations, risk landscape, and threat actor activities using threat modeling, risk forecasting, and other techniques to identify where investments in security should be made. Internal assessments occur based on results from risk management exercises, changes in infrastructure, cybersecurity risks, threat actor activity, and in response to other internal or external events. External assessments are conducted by independent assessors, consultants, or auditors, as relevant, and occur regularly in order to maintain our certifications and accreditations with certain compliance regimes (for example, FedRAMP).
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We also provide employees with policies and training in areas such as ethics, corruption, information security, social engineering, data protection, and compliance, and with regular updates on the cybersecurity program and potential threats.
Additionally, Palantir utilizes third-party software, services, and providers in our cybersecurity program in furtherance of our security processes such as endpoint security, threat intelligence, cloud security, and authentication services. The third-party vendors we engage with are generally required to implement industry standard technical, administrative, cybersecurity, and physical measures designed to protect the security and confidentiality of Palantir information (including customer information). Additionally, such providers undergo review, dependent on the software and services they are expected to provide, as part of our vendor onboarding process and may be subject to additional review upon certain critical events, or in connection with contract renewals. Third-party providers must notify Palantir promptly of relevant security incidents.
We face a number of cybersecurity risks in connection with our business. To date, our business strategy, results of operations, and financial condition have not been materially affected by cybersecurity incidents. For additional information, please refer to Item 1A. “Risk Factors” in this Annual Report on Form 10-K, including the risk factors under the section entitled “Risks Related to Intellectual Property, Information Technology, Data Privacy, and Security” .
Governance
Risk is inherent with every business, and we face a number of risks, including strategic, financial, business and operational, legal and compliance, and reputational. We have designed and implemented processes to manage risk in our operations. Management is responsible for the day-to-day management of risks we face, while our Board of Directors, as a whole and assisted by its committees, has responsibility for the oversight of risk management. Our Board of Directors administers its cybersecurity risk oversight function directly and may choose to administer this function through its committees as well.
Our Chief Information Security Officer oversees our cybersecurity program, policies and processes, including those described in “Risk Management and Strategy” above, and works with the information security team and other stakeholders on the prevention, detection, mitigation, response and remediation of cybersecurity incidents, as applicable. As our information security team monitors the security and effectiveness of our policies and processes, they also work to keep the Chief Information Security Officer and other members of leadership informed of critical incidents, process updates, or other material details, in accordance with our internal reporting structure. Our Chief Information Security Officer in turn provides periodic briefings to our Board of Directors regarding our company’s cybersecurity risks and activities, which would include recent material cybersecurity incidents and related responses, if any, changes to the risk landscape, and updates or changes to the cybersecurity program. Our current Chief Information Security Officer has over 15 years of systems engineering and technical cybersecurity experience, and holds an undergraduate degree in computer science and a graduate degree in business administration. He has also completed graduate-level courses in computer science and holds certifications in information security. The information security team includes employees with broad ranging experience in cybersecurity threat assessments and detection, incident response, and mitigation and management of various types of threats, including from insiders and nation-state actors.

ITEM 2. PROPERTIES
Facilities
We have leased principal properties in Denver, Colorado, which was the location of our corporate headquarters; in Palo Alto, California; New York City, New York; Washington, D.C.; and London, England. In addition, we lease various other office spaces throughout the world.
We believe that our existing facilities are adequate to meet current requirements, and that suitable additional or substitute space will be available as needed to accommodate any further physical expansion of operations and for any additional offices.

ITEM 3. LEGAL PROCEEDINGS
From time to time we are subject to legal proceedings and claims arising in the ordinary course of business. Based on our current knowledge, we believe that the amount or range of reasonably possible losses will not, either individually or in the aggregate, have a material adverse effect on our business, results of operations, or financial condition.
The results of any litigation cannot be predicted with certainty, and an unfavorable resolution in any legal proceedings could materially affect our future business, results of operations, or financial condition. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
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For information on legal proceedings, refer to Note 8. Commitments and Contingencies—Litigation and Legal Proceedings in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information for Common Stock
Our Class A common stock trades on The Nasdaq Stock Market LLC (Nasdaq Global Market Select) under the symbol “PLTR”.
Our Class B common stock and Class F common stock are not listed on any stock exchange nor traded on any public market.
Holders of Record
As of February 10, 2026, there were 2,178 holders of record of our Class A common stock, 16 holders of record of our Class B common stock, and one holder of record of our Class F common stock. Because many of our shares of Class A common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
Dividend Policy
We have never declared or paid any cash dividends on our capital stock. We intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our Board of Directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions, and other factors that our Board of Directors may deem relevant. In addition, the terms of our undrawn credit facility contain restrictions on our ability to declare and pay cash dividends on our capital stock, and we may enter into credit agreements or other borrowing arrangements in the future that may restrict our ability to declare and pay cash dividends.
Issuer Purchases of Equity Securities
The following table summarizes stock repurchases during the three months ended December 31, 2025 (in thousands, except share and per share amounts):

Period Total Number of Shares Purchased Average Price Paid per Share (1)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)

October 1, 2025 - October 31, 2025 37,533  $ 183.79  37,533  $ 873,117 
November 1, 2025 - November 30, 2025 32,630  $ 174.65  32,630  $ 867,418 
December 1, 2025 - December 31, 2025 36,008  $ 183.26  36,008  $ 860,819 
Total 106,171  106,171 

—————
(1) Includes related commissions.
(2) In August 2023, our Board of Directors authorized the Share Repurchase Program which allows for the repurchase of up to $1.0 billion of our outstanding shares of Class A common stock. The Share Repurchase Program does not obligate us to repurchase any specific number of shares and may be discontinued at any time. During the year ended December 31, 2025, we repurchased 600,446 shares of our Class A common stock under the Share Repurchase Program. The Share Repurchase Program was terminated in January 2026. For additional information see Note 9. Stockholders’ Equity in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

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Performance Graph
This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.
The following graph compares the cumulative total return to stockholders on our Class A common stock since September 30, 2020 (the date our Class A common stock commenced trading on the New York Stock Exchange relative to the cumulative total returns of the Standard & Poor’s 500 Index and the Standard & Poor’s Information Technology Index over the same period. An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock and in each index at the market close on September 30, 2020, and its relative performance is tracked through December 31, 2025. The returns shown are based on historical results and are not intended to suggest future performance.

Unregistered Sales of Equity Securities
None.

ITEM 6. [RESERVED]

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current plans, expectations, and beliefs, involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements. You should review the section titled “Special Note Regarding Forward-Looking Statements” for a discussion of forward-looking statements and the section titled “Risk Factors” for a discussion of factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis and elsewhere in this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.
This section of this Annual Report on Form 10-K generally discusses fiscal years 2025 and 2024 items and year-to-year comparisons between fiscal years 2025 and 2024. Discussions of fiscal year 2024 items and year-to-year comparisons between fiscal years 2024 and 2023 that are not included in this Annual Report on Form 10-K can be found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on February 18, 2025 and is incorporated herein by reference.

Overview
We build software that empowers organizations to effectively integrate their data, decisions, and operations at scale.
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We were founded in 2003 and started building software for the intelligence community in the United States to assist in counterterrorism investigations and operations. We later began working with commercial enterprises, who often faced fundamentally similar challenges in working with data.
We have built four principal software platforms, Gotham, Foundry, Apollo, and AIP. Foundry is our foundational data operations platform, which provides the core capabilities for data management, logic authoring, systemic mapping development through our Ontology, analytics, and workflow development. AIP is our generative AI platform, which provides secure connectivity to third-party-provided LLMs, a development toolchain for building AI-powered agents and automations, an array of AI-enabled end user applications, a broad evaluations framework for governing AI workflows in production, and more. Apollo is our continuous delivery platform, enabling the orchestration of upgrades of services and assets every day to manage the underlying infrastructure that hosts our other platforms. Gotham integrates with our other platforms, as well as our broader defense offerings, to power a wide array of missions across allied defense and intelligence operations.
For over a decade, Gotham has surfaced insights for global defense agencies, the intelligence community, disaster relief organizations and beyond. Foundry is becoming a central operating system not only for individual institutions but also for entire industries. Apollo, which we began offering as a commercial solution in 2021, is a cloud-agnostic, single control layer that coordinates ongoing delivery of new features, security updates, and platform configurations, helping to ensure the continuous operation of critical systems. Apollo allows our customers to run their software in virtually any environment.
In 2023, we began deploying our newest offering, AIP, which is designed for customers across the commercial and government sectors, enabling them to derive value from recent breakthroughs in artificial intelligence via the combination of our existing software platforms with generative AI models, including LLMs. We believe AIP uniquely allows users to connect LLMs and other AI with their data and operations to facilitate decision-making within the legal, ethical, and security constraints that they require.
The Ontology has continuously evolved over time, serving as the heart of our platforms by activating data and analytics inside operations, enabling real-time connectivity between data, analytics, and operational teams, as well as AI. Ontology generally refers to the systematic mapping of data to meaningful context. The Palantir Ontology goes far beyond the traditional concept by integrating the elements of a decision—the data, logic, and actions—into a foundational representation of the organization, and allowing users to build interconnected workflows, turning specialized expertise into shared infrastructure to dynamically optimize decision-making across the enterprise. The Ontology can help create a shared understanding across all users in a data ecosystem regardless of technical skills, enabling organizations to scale more efficiently and rapidly.
While our focus in the short term remains on making our software platforms available to increasingly broad swaths of the market, we are also working to identify additional component parts and products embedded within those platforms that have potential as commercial offerings on their own.
We believe that every institution faces challenges that our platforms and products were designed to address. Our approach with all our clients is to establish a partnership that transforms the way they use data in pursuit of their goals.
We regularly evaluate partnerships and investment opportunities in complementary businesses, employee teams, technologies, and intellectual property rights in an effort to expand our product and service offerings.
Our Business
Our customers pay us to use the software platforms we have built. While we generally offer contract terms of one to five years in length, our customers sometimes enter into shorter-term contracts. Revenue is generally recognized ratably over the contract term. Many of our customer contracts contain termination for convenience provisions.
For the year ended December 31, 2025, we generated $4.5 billion in revenue, reflecting a 56% growth rate from the year ended December 31, 2024, when we generated $2.9 billion in revenue.
In the year ended December 31, 2025, we generated income from operations of $1.4 billion, or adjusted income from operations of $2.3 billion when excluding stock-based compensation and related employer payroll taxes. In the year ended December 31, 2024, we generated income from operations of $310.4 million, or adjusted income from operations of $1.1 billion when excluding stock-based compensation and related employer payroll taxes.
In the year ended December 31, 2025, our gross profit was $3.7 billion, reflecting a gross margin of 82%, or 84% when excluding stock-based compensation. In the year ended December 31, 2024, our gross profit was $2.3 billion, reflecting a gross margin of 80%, or 83% when excluding stock-based compensation.
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For more information about our adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes; and gross profit and gross margin, when excluding stock-based compensation; as well as reconciliations from income from operations and gross profit, see the section titled “Non-GAAP Reconciliations” below.
Our Customers
We define a customer as an organization from which we have recognized revenue during the trailing twelve-month period. During the period ended December 31, 2025, we had 954 customers, including companies in various commercial sectors and government agencies around the world. During the period ended December 31, 2024, we had 711 customers.
For large government agencies, where a single institution has multiple divisions, units, or subsidiary agencies, each such division, unit, or subsidiary agency that enters into a separate contract with us and is invoiced as a separate entity is treated as a separate customer. For example, while the U.S. Food and Drug Administration, Centers for Disease Control and Prevention, and National Institutes of Health are subsidiary agencies of the U.S. Department of Health and Human Services, we treat each of those agencies as a separate customer given that the governing structures and procurement processes of each agency are independent.
We have built lasting and significant customer relationships and partnerships with some of the world’s leading government institutions and companies. As of December 31, 2025, we expect to generate revenue from contracts closed during each of the three months and year ended December 31, 2025 for an additional four years, on a dollar-weighted average contract duration basis. Dollar-weighted average contract duration represents the length of time we expect to generate revenue on average, based on the total potential lifetime length and value of contracts entered into with, or awarded by, our customers at the time of contract execution, presuming that our customers will exercise all of the contractual options available to them and no termination of contracts, although many of our contracts are subject to termination provisions, including for convenience, and there can be no guarantee that contracts are not terminated or that contract options will be exercised. We calculate this duration on a dollar-weighted basis to adjust for smaller deals. The timing of our customer billings and receipt of payments varies from contract to contract. Our average revenue for the top twenty customers during the trailing twelve months ended December 31, 2025 was $93.9 million, which grew 45% from an average of $64.6 million in revenue from the top twenty customers during the trailing twelve months ended December 31, 2024, demonstrating our expanding relationships with existing customers.
Organizations in the commercial and government sectors face similar challenges when it comes to managing data, and we intend to expand our reach in both markets moving forward. Our decisions about which customer relationships require further investment may change over time, based on our assessment of the potential long-term value that our software can generate for them. We conduct pilots and bootcamps with customers, generally at our own expense and without a guarantee of future returns, in order to access a unique set of opportunities that others may pass over for lack of resources and shorter investment horizons. We manage customers at the account level, not by industry or sector, so that we can optimize on the specific growth opportunities for each customer. In the year ended December 31, 2025, 54% of our revenue came from government customers and 46% came from commercial customers.
Our U.S. customers have been a meaningful source of revenue growth for our business. In the year ended December 31, 2025, we generated 74% of our revenue from customers in the United States and the remaining 26% from non-U.S. customers. Revenue from our U.S. customers during the trailing twelve months ended December 31, 2025 was $3.3 billion, which grew 75% from the prior twelve-month period. We expect that U.S. customers will continue to be a source of significant revenue growth for us.
We continue to believe that our government customers remain a meaningful source of revenue for our business, particularly during periods of economic uncertainty. However, large government customers in particular are generally subject to a number of uncertainties regarding budgets and spending levels, changes in timing and spending priorities, and regulatory and policy changes, which can make it difficult to predict when, or if, we will make sales to such customers or the size and scope of any contract awards. See also the discussion of “ Risks Related to Relationships and Business with the Public Sector” within “ Item 1A. Risk Factors” included in this Annual Report on Form 10-K.
Expansion of Access to Platforms
The speed with which our platforms can be deployed has significantly expanded the range of potential customers with which we plan on partnering over the long term. We anticipate that our reach among an increasingly broad set of customers, in both the commercial and government sectors, will accelerate moving forward. We believe that, as these new partners grow, we will grow with them.
Our proximity to these businesses and the industries in which they are operating has enhanced, and is expected to continue enhancing, our own product and business development efforts, as we continue expanding access to our platforms to the broadest possible set of customers.
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Total Remaining Deal Value
We are focused on building strategic relationships with, and delivering significant outcomes for, our customers over the long term. Our contracts with our customers reflect that long-term orientation, often lasting for multiple years at a time.
Total remaining deal value is the total remaining value, as of the end of the reporting period, of contracts that have been entered into with, or awarded by, our customers. Total remaining deal value presumes the exercise of all contract options available to our customers and no termination of contracts. However, many of our contracts are subject to termination provisions, including for convenience, and there can be no guarantee that contracts are not terminated or that contract options will be exercised. Further, total remaining deal value may exclude all or some portion of the value of certain commercial contracts as a result of our ongoing assessments of customers’ financial condition, including the consideration of such customers’ ability and intention to pay, and whether such contracts continue to meet the criteria for revenue recognition, among other factors.
As of December 31, 2025, the total remaining deal value of the contracts, as defined above, was $11.2 billion, up 105% from December 31, 2024, when our total remaining deal value of such contracts was $5.4 billion.
Of our total remaining deal value, as of December 31, 2025, the total remaining deal value of the contracts that we entered into with commercial customers, including existing contractual obligations and available contractual options, as defined above, was $6.8 billion, up 117% from December 31, 2024, when the total remaining deal value of such contracts was $3.1 billion.
As of December 31, 2025, the total remaining deal value of the contracts that we had been awarded by government agencies in the United States and allied countries around the world, including existing contractual obligations and contractual options available to those government agencies, was $4.4 billion, up 90% from December 31, 2024, when the total value of such contracts was $2.3 billion.
When calculating the total remaining deal value of government contracts, we do not include government contracts known as IDIQ contracts, totaling $12.3 billion, as of December 31, 2025, that we have also been awarded, but where the funding of such contracts has not yet been determined or guaranteed.
Many of our government and commercial contracts are subject to termination for convenience provisions. Additionally, the U.S. federal government is prohibited from exercising contract options more than one year in advance. As a result, there can be no guarantee that our customer contracts will not be terminated or that contract options will be exercised.

Macroeconomic Trends
As a corporation with an international presence, we are subject to risks and uncertainties caused by significant events with macroeconomic impacts, including, but not limited to, geopolitical tensions, fluctuating interest rates, monetary policy changes, foreign currency fluctuations, and the potential or actual imposition of tariffs or other impacts on trade relations. Additionally, these macroeconomic impacts have disrupted, and may continue to disrupt, the operations of our customers and prospective customers. We continuously monitor the direct and indirect impacts of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape.
See the section titled “Risk Factors” included elsewhere in this Annual Report on Form 10-K for further discussion of the impact of macroeconomic trends on our business.
Geopolitical Tensions
Our business operations are subject to interruption by events that are beyond our control, including geopolitical tensions. We continue to closely monitor the impact of various geopolitical tensions and their global impacts on our business. While the ongoing Russia-Ukraine, Israel and broader Middle East, and other global conflicts are still evolving and the outcomes remain highly uncertain, we do not expect that the resulting challenging macroeconomic conditions will have a material impact on our business or results of operations.
We do not currently have office locations in Russia or Palestinian territories and none of our revenues came from sales to entities headquartered in those countries or territories. Our current operations related to Ukraine and Israel are not material to our financial position or results of operations. If the respective conflicts continue or worsen, leading to greater disruptions and uncertainty within the technology industry or global economy, our business and results of operations could be negatively impacted.
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Foreign Currency Exchange Rates
Exchange rates are subject to significant and rapid fluctuations due to a number of factors, including interest rate changes, monetary policy changes, and political and economic uncertainty which may adversely affect our results of operations or financial position.
Our contracts with customers and vendors are primarily denominated in U.S. dollars. However, when the U.S. dollar strengthens compared to other currencies (primarily the Euro and GBP), it has had, and could in the future have, an unfavorable impact on our revenues and expenses from certain non-U.S. customers or vendors whose contracts are denominated in currencies other than the U.S. dollar. Additionally, certain of our U.S. and non-U.S. subsidiaries may hold monetary assets and liabilities in currencies other than their functional currency (primarily the JPY, Euro, and GBP), which could subject our results of operations and cash flows to adverse fluctuations due to changes in such foreign currency exchange rates as compared to the U.S. dollar. For the year ended December 31, 2025, such impacts were not material to our financial position or results of operations.
Customer Impacts
Macroeconomic conditions have impacted, and may continue to adversely impact, our customers’ businesses. With economic uncertainty, we may experience additional negative impacts on new customer acquisition, customer renewals, and customer collections, among other things, which could negatively impact our business and results of operations.

Key Business Measure
In addition to the measures presented in our consolidated financial statements, we use the following key non-GAAP business measure to help us evaluate our business, identify trends affecting our business, formulate business plans and financial projections, and make strategic decisions.
Contribution Margin
We believe that the revenue we generate relative to the costs we incur in order to generate such revenue is an important measure of the efficiency of our business. We define contribution margin as revenue less our cost of revenue and sales and marketing expenses, excluding stock-based compensation, divided by revenue.
Revenue is allocated to each customer account directly. The cost of revenue and sales and marketing costs include both the costs associated with the deployment and operation of our software as well as expenses associated with identifying new customers and expanding partnerships with existing ones. Our software engineers working with existing customers often manage the deployment and operation of our platforms as well as identify new ways that those platforms can be used. To calculate the contribution by segment, we allocate cost of revenue and sales and marketing expenses, excluding stock-based compensation, to an account pro rata based on headcount and time spent on the account during the period. To the extent certain costs or personnel are not directly assigned to a specific account, they are allocated pro rata based on total headcount staffed during such period. Direct costs, such as third-party cloud hosting services, are directly allocated to the account to which they relate. Allocated revenues and expenses are then aggregated into a segment based upon the customer account to which they relate.
Contribution margin, both across our business and segments, is intended to capture how much we have earned from customers after accounting for the costs associated with deploying and operating our software, as well as any sales and marketing expenses involved in acquiring and expanding our partnerships with customers or potential customers, including allocated overhead. We exclude stock-based compensation as it is a noncash expense.
We believe that our contribution margin provides an important measure of the efficiency of our operations over time. We have included contribution margin because it is a key measure used by our management to evaluate our performance, and we believe that it also provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team. Our calculation of contribution margin may differ from similarly titled measures, if any, reported by other companies. Contribution margin should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
For more information about contribution margin, including the limitations of this measure, and a reconciliation to income from operations, see the section titled “Non-GAAP Reconciliations” below.
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Non-GAAP Reconciliations
We use the non-GAAP measures contribution margin; gross profit and gross margin, excluding stock-based compensation; and adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes, to help us evaluate our business, identify trends affecting our business, formulate business plans and financial projections, and make strategic decisions. We exclude stock-based compensation, which is a noncash expense, from these non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance and provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team. Additionally, we exclude employer payroll taxes related to stock-based compensation as it is difficult to predict and outside of our control.
Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Further, these metrics have certain limitations, as they do not include the impact of certain expenses that are reflected in our consolidated statements of operations. Thus, our non-GAAP contribution margin; gross profit and gross margin, excluding stock-based compensation; and adjusted income from operations should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.
We compensate for these limitations by providing reconciliations of these non-GAAP measures to the most comparable GAAP measures. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measures.
Contribution Margin
The following table provides a reconciliation of contribution margin for the years ended December 31, 2025 and 2024 (in thousands, except percentages):

Years Ended December 31,
2025 2024
Income from operations $ 1,414,015  $ 310,403 
Add:
Research and development expenses (1)
420,838  342,813 
General and administrative expenses (1)
423,811  375,094 
Total stock-based compensation expense 684,033  691,638 
Total contribution $ 2,942,697  $ 1,719,948 
Contribution margin 66  % 60  %

————
(1) Excludes stock-based compensation.
Gross Profit and Gross Margin, Excluding Stock-Based Compensation
The following table provides a reconciliation of gross profit and gross margin, excluding stock-based compensation for the years ended December 31, 2025 and 2024 (in thousands, except percentages):

Years Ended December 31,
2025 2024
Gross profit $ 3,686,269  $ 2,299,517 
Add: stock-based compensation 64,555  69,065 
Gross profit, excluding stock-based compensation $ 3,750,824  $ 2,368,582 
Gross margin, excluding stock-based compensation 84  % 83  %

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Adjusted Income from Operations
The following table provides a reconciliation of adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes for the years ended December 31, 2025 and 2024 (in thousands, except percentages):

Years Ended December 31,
2025 2024
Income from operations $ 1,414,015  $ 310,403 
Add: stock-based compensation 684,033  691,638 
Add: employer payroll taxes related to stock-based compensation 156,052  126,021 
Adjusted income from operations $ 2,254,100  $ 1,128,062 
Adjusted operating margin 50  % 39  %

Components of Results of Operations
Revenue
We generate revenue from the sale of subscriptions to access our software platforms in our hosted environment along with ongoing O&M services (“Palantir Cloud”), software subscriptions in our customers’ environments with ongoing O&M services (“On-Premises Software”), and professional services.
Palantir Cloud
Our Palantir Cloud subscriptions grant customers the right to access the software functionality in a hosted environment controlled by Palantir and are sold together with stand-ready O&M services, as further described below. We agree to provide continuous access to our hosted software throughout the contract term. Revenue associated with Palantir Cloud subscriptions is generally recognized over the contract term on a ratable basis, which is consistent with the transfer of control of the Palantir services to the customer.
On-Premises Software
Sales of our software licenses, primarily term licenses, grant customers the right to use functional intellectual property, either on their internal hardware infrastructure or on their own cloud instance, over the contractual term and are also sold together with stand-ready O&M services. O&M services include critical updates and support and maintenance services required to operate the software and, as such, are necessary for the software to maintain its intended utility over the contractual term. Because of this requirement, we have concluded that the software licenses and O&M services, which together we refer to as our On-Premises Software, are highly interdependent and interrelated and represent a single distinct performance obligation within the context of the contract. Revenue is generally recognized over the contract term on a ratable basis.
Professional Services
Our professional services support the customers’ use of the software and include, as needed, on-demand user support, user-interface configuration, training, and ongoing ontology and data modeling support. Professional services contracts typically include the provision of on-demand professional services for the duration of the contractual term, which may be coterminous or non-coterminous with a Palantir Cloud subscription or the On-Premises Software. Professional services are on-demand, whereby we perform services throughout the service period; therefore, the revenue is recognized over the related term.
Cost of Revenue
Cost of revenue primarily includes salaries, stock-based compensation expense, and benefits for personnel involved in performing O&M and professional services, as well as subcontractor expenses, field-service representatives, third-party cloud hosting services, hardware costs, and other direct costs.
We expect that cost of revenue will increase in absolute dollars as our revenue grows and will vary from period to period as a percentage of revenue.
Sales and Marketing
Our sales and marketing efforts span all stages of our sales cycle, including personnel involved with sales functions, and executing pilots at new or existing customers. Sales and marketing costs primarily include salaries, stock-based compensation expense, variable compensation, including commissions, and benefits for our sales force and personnel involved in sales
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functions, executing on pilots, and customer growth activities; as well as third-party cloud hosting services for our pilots, and marketing and sales event-related costs. Sales and marketing costs are generally expensed as incurred.
We expect that sales and marketing expenses will increase in absolute dollars as we continue to invest in our potential and current customers, in growing our business, in our sales force, and in enhancing our brand awareness.
Research and Development
Our research and development efforts are aimed at continuing to develop and refine our offerings, including adding new platforms, features, and modules, increasing their functionality, and enhancing the usability of our platforms. Research and development costs primarily include salaries, stock-based compensation expense, and benefits for personnel involved in performing the activities to develop and refine our platforms and products, as well as third-party cloud hosting services and other IT-related costs. Research and development costs are expensed as incurred.
We plan to continue to invest in personnel to support our research and development efforts. As a result, we expect that research and development expenses will increase in absolute dollars for the foreseeable future as we continue to invest to support these activities.    
General and Administrative
General and administrative costs include salaries, stock-based compensation expense, and benefits for personnel involved in our executive, finance, legal, human resources, and administrative functions, as well as third-party professional services and fees.
We expect that general and administrative expenses will increase in absolute dollars as we hire additional personnel and enhance our systems, processes, and controls to support the growth in our business as well as our continuing compliance and reporting requirements as a public company.
Interest Income
Interest income consists primarily of interest income earned on our cash, cash equivalents, U.S. Treasury securities, and restricted cash balances.
Other Income (Expense), Net
Other income (expense), net consists primarily of realized and unrealized losses from equity securities and foreign currency exchange gains and losses.
Provision for Income Taxes
Provision for income taxes consists of income taxes related to foreign and state jurisdictions in which we conduct business and withholding taxes.
Net Income Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests represents the share of income that is not attributable to the Company.
Segments
We have two operating segments, commercial and government, which were determined based on the manner in which the chief operating decision maker, who is our Chief Executive Officer, manages our operations for purposes of allocating resources and evaluating performance. Various factors, including our organizational and management reporting structure and customer type, were considered in determining these operating segments.
Our operating segments are described below:
• Commercial: This segment primarily serves customers working in non-government industries.
• Government: This segment primarily serves customers that are U.S. government and non-U.S. government agencies.
Segment profitability is evaluated based on contribution and contribution margin. Contribution is segment revenue less the related costs of revenue and sales and marketing expenses, excluding stock-based compensation expense. Contribution margin is contribution divided by revenue. To the extent costs of revenue or sales and marketing expenses are not directly attributable to a particular segment, they are allocated based upon headcount at each operating segment during the period. We use it, in part, to evaluate the performance of, and allocate resources to, each of our operating segments, which excludes certain operating expenses that are not allocated to operating segments because they are separately managed at the consolidated corporate level,
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or are noncash costs. These noncash or unallocated costs include stock-based compensation expense, research and development costs, and general and administrative costs.

Results of Operations
The following table summarizes our consolidated statements of operations data (in thousands):

Years Ended December 31,
2025 2024 2023
Revenue $ 4,475,446  $ 2,865,507  $ 2,225,012 
Cost of revenue 789,177  565,990  431,105 
Gross profit 3,686,269  2,299,517  1,793,907 
Operating expenses:
Sales and marketing 1,056,859  887,755  744,992 
Research and development 557,677  507,878  404,624 
General and administrative 657,718  593,481  524,325 
Total operating expenses 2,272,254  1,989,114  1,673,941 
Income from operations 1,414,015  310,403  119,966 
Interest income 229,181  196,792  132,572 
Other income (expense), net 14,172  (18,022) (15,447)
Income before provision for income taxes 1,657,368  489,173  237,091 
Provision for income taxes 22,724  21,255  19,716 
Net income 1,634,644  467,918  217,375 
Less: Net income attributable to noncontrolling interests 9,611  5,728  7,550 
Net income attributable to common stockholders $ 1,625,033  $ 462,190  $ 209,825 

The following table sets forth the components of our consolidated statements of operations data as a percentage of revenue:

Years Ended December 31,
2025 2024 2023
Revenue 100  % 100  % 100  %
Cost of revenue 18  20  19 
Gross margin 82  80  81 
Operating expenses:
Sales and marketing 23  31  34 
Research and development 12  18  18 
General and administrative 15  20  24 
Total operating expenses 50  69  76 
Income from operations 32  11  5 
Interest income 5  7  6 
Other income (expense), net —  (1) — 
Income before provision for income taxes 37  17  11 
Provision for income taxes 1  1  1 
Net income 36  16  10 
Less: Net income attributable to noncontrolling interests —  —  1 
Net income attributable to common stockholders 36  % 16  % 9  %

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Comparison of the Years Ended December 31, 2025 and 2024
Revenue

Years Ended December 31, Change
2025 2024 Amount %
Revenue:
Government $ 2,402,287  $ 1,569,605  $ 832,682  53  %
Commercial 2,073,159  1,295,902  777,257  60  %
Total revenue $ 4,475,446  $ 2,865,507  $ 1,609,939  56  %

Revenue increased by $1.6 billion, or 56%, for the year ended December 31, 2025 compared to 2024. Revenue from government customers increased by $832.7 million, or 53%, for the year ended December 31, 2025 compared to 2024. Of the increase, $774.0 million was from government customers existing as of December 31, 2024. Revenue from U.S. government customers was $1.9 billion for the year ended December 31, 2025 compared to $1.2 billion for the same period in 2024. Revenue from commercial customers increased by $777.3 million, or 60%, for the year ended December 31, 2025 compared to 2024. Of the increase, $425.2 million was from commercial customers existing as of December 31, 2024, including a decrease of $37.0 million of revenue from Strategic Commercial Contracts. Revenue from U.S. commercial customers was $1.5 billion for the year ended December 31, 2025 compared to $702.3 million for the same period in 2024, a 109% increase.
Generally, increases in revenue from our existing customers are related to the increased adoption of our products and services within their organizations. For additional information on Strategic Commercial Contracts, see Note 4. Investments and Fair Value Measurements in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Cost of Revenue and Gross Profit

Years Ended December 31, Change
2025 2024 Amount %
Cost of revenue $ 789,177  $ 565,990  $ 223,187  39  %
Gross profit 3,686,269  2,299,517  1,386,752  60  %
Gross margin 82  % 80  %

Cost of revenue for the year ended December 31, 2025 increased by $223.2 million, or 39%, compared to 2024. The increase was primarily due to increases of $94.6 million in third-party cloud hosting services, $38.0 million in subcontractor expenses, $29.1 million in field-service representatives, and $26.9 million in payroll and other payroll-related costs.
Our gross margin for the year ended December 31, 2025 increased from 80% for the same period in 2024 to 82%.
For additional information related to stock-based compensation expense, see the section titled “Stock-Based Compensation” below.
Operating Expenses

Years Ended December 31, Change
2025 2024 Amount %
Sales and marketing $ 1,056,859  $ 887,755  $ 169,104  19  %
Research and development 557,677  507,878  49,799  10  %
General and administrative 657,718  593,481  64,237  11  %
Total operating expenses $ 2,272,254  $ 1,989,114  $ 283,140  14  %

Sales and Marketing
Sales and marketing expenses increased by $169.1 million, or 19%, for the year ended December 31, 2025 compared to 2024. The increase was primarily due to increases of $76.4 million in payroll and other payroll-related costs, $18.3 million in marketing expenses, and $16.4 million in stock-based compensation expense and related expenses.
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For additional information related to stock-based compensation expense, see the section titled “Stock-Based Compensation” below.
Research and Development
Research and development expenses increased by $49.8 million, or 10%, for the year ended December 31, 2025 compared to 2024. The increase was primarily due to increases of $35.6 million in third-party cloud hosting services and $19.0 million in payroll and other payroll-related costs. These were partially offset by a decrease of $19.8 million in stock-based compensation expense and related expenses
For additional information related to stock-based compensation expense, see the section titled “Stock-Based Compensation” below.
General and Administrative
General and administrative expenses increased by $64.2 million, or 11%, for the year ended December 31, 2025 compared to 2024. The increase was primarily due to increases of $22.7 million in stock-based compensation expense and related expenses, and $19.4 million in payroll and other payroll-related costs.
For additional information related to stock-based compensation expense, see the section titled “Stock-Based Compensation” below.
Stock-Based Compensation

Years Ended December 31, Change
2025 2024 Amount %
Cost of revenue $ 64,555  $ 69,065  $ (4,510) (7) %
Sales and marketing 248,732  239,121  9,611  4  %
Research and development 136,839  165,065  (28,226) (17) %
General and administrative 233,907  218,387  15,520  7  %
Total stock-based compensation expense $ 684,033  $ 691,638  $ (7,605) (1) %

Stock-based compensation expenses decreased by $7.6 million, or 1%, for the year ended December 31, 2025 compared to 2024. The decrease was driven by reductions in expense from SARs that fully vested and expensed during the year ended December 31, 2024, partially offset by expense from new grants awarded since and within the year ended December 31, 2024, including RSUs, P-RSUs, and SARs.
Interest Income

Years Ended December 31, Change
2025 2024 Amount
Interest income $ 229,181  $ 196,792  $ 32,389 

Interest income increased by $32.4 million for the year ended December 31, 2025 compared to 2024 primarily due to an increase in our interest-bearing cash, cash equivalents, and investments in short-term U.S. Treasury securities.
Other Income (Expense), Net

Years Ended December 31, Change
2025 2024 Amount
Other income (expense), net $ 14,172  $ (18,022) $ 32,194 

Other income (expense), net changed by $32.2 million for the year ended December 31, 2025 compared to 2024 primarily due to upward adjustments in privately-held securities and lower realized losses from marketable securities, partially offset by an increase in unrealized losses on marketable securities.
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Provision for Income Taxes

Years Ended December 31, Change
2025 2024 Amount
Provision for income taxes $ 22,724  $ 21,255  $ 1,469 

The increase in the provision for income taxes was not material for the year ended December 31, 2025 compared to 2024. For additional information see Note 11. Taxes in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Liquidity and Capital Resources
As of December 31, 2025, our principal sources of liquidity were cash, cash equivalents, and short-term U.S. Treasury securities totaling $7.2 billion. We generated positive cash flow from operations for the year ended December 31, 2025. We believe that we have sufficient liquidity to meet our operating requirements for at least the next twelve months and thereafter for the foreseeable future. We continue to evaluate our liquidity and capital resources, including our access to external capital, to ensure we can finance future capital requirements.
The following table summarizes our cash flows for the periods indicated (in thousands):

Years Ended December 31,
2025 2024 2023
Net cash provided by (used in):
Operating activities $ 2,134,473  $ 1,153,865  $ 712,183 
Investing activities (2,783,551) (340,655) (2,711,180)
Financing activities (26,910) 463,364  218,839 
Effect of foreign exchange on cash, cash equivalents, and restricted cash
7,477  (6,745) 2,930 
Net increase (decrease) in cash, cash equivalents, and restricted cash
$ (668,511) $ 1,269,829  $ (1,777,228)

Operating Activities
Net cash provided by operating activities was $2.1 billion and $1.2 billion for the year ended December 31, 2025 and 2024, respectively. The increase was primarily driven by revenue growth and timing of payments from customers, partially offset by timing of billings to customers.
Investing Activities
Net cash used in investing activities was $2.8 billion and $0.3 billion for the year ended December 31, 2025 and 2024, respectively. The increase in cash used in investing activities was primarily due to more purchases of short-term U.S. Treasury securities and privately-held securities compared to the prior year, partially offset by sales and redemptions of marketable securities.
Financing Activities
Net cash used in financing activities was $26.9 million for the year ended December 31, 2025 and net cash provided by financing activities was $463.4 million for the year ended December 31, 2024. Financing cash inflows consisted primarily of proceeds from the exercise of common stock options. Financing cash outflows were driven by taxes paid in the current year related to the net share settlement of SARs during the year ended December 31, 2024 and repurchases of our Class A common stock.
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Material Cash Requirements
The following table summarizes our contractual obligations and commitments, which are associated with agreements that are enforceable and legally binding, as of December 31, 2025 (in thousands):

Payments Due by Period
Total Less than 1 year 1-3 years 3-5 years More than 5 years
Noncancelable purchase commitments (1)
$ 1,758,951  $ 132,682  $ 515,169  $ 411,100  $ 700,000 
Operating lease commitments, net of sublease income amounts (2)
221,098  48,293  53,090  37,754  81,961 

Total contractual obligations and commitments $ 1,980,049  $ 180,975  $ 568,259  $ 448,854  $ 781,961 

—————
(1) Noncancelable purchase commitments primarily relate to purchase commitments for third-party cloud hosting services and represents only contracts which are enforceable and legally binding. Obligations under contracts that we can cancel without a significant penalty are not included in the table above. Refer to Note 8. Commitments and Contingencies in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
(2) The contractual commitment amounts under operating leases in the table above are primarily related to facility and equipment leases. Operating lease commitments are reflected net of $71.4 million of sublease income from tenants in certain of our leased facilities and $63.2 million of imputed interest. Refer to Note 7. Leases in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
As of December 31, 2025, we had no outstanding debt balances and additional available and undrawn revolving commitments of $500.0 million under our credit facility. For more information, see Note 6. Debt in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
In August 2023, our Board of Directors authorized a stock repurchase program of up to $1.0 billion of our outstanding shares of Class A common stock (the “Share Repurchase Program”). During the year ended December 31, 2025, the Company repurchased and subsequently retired 0.6 million shares of its Class A common stock for an aggregate amount, including commissions, of $75.0 million under our Share Repurchase Program. In January 2026, the Company terminated the Share Repurchase Program. For additional information on our Share Repurchase Program, see Note 9. Stockholders’ Equity in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Our future capital requirements will depend on many factors, including, but not limited to, the rate of our growth, our ability to attract and retain customers and their willingness and ability to pay for our products and services, and the timing and extent of spending to support our efforts to market and develop our products. Further, we may enter into future arrangements to acquire or invest in businesses, products, services, strategic partnerships, and technologies. As such, we may seek additional equity or debt financing on an as needed or opportunistic basis. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If additional funds are not available to us on acceptable terms, or at all, our business, financial condition, and results of operations could be adversely affected.

Critical Accounting Policies and Estimates
Our consolidated financial statements and the accompanying notes thereto included elsewhere in this Annual Report on Form 10-K are prepared in accordance with GAAP. The preparation of consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.
We believe that the accounting policies described below involve a significant degree of judgment and complexity. Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. For further information, see Note 2. Significant Accounting Policies in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Revenue Recognition
We generate revenue from the sale of subscriptions to access our software platforms via Palantir Cloud and On-Premises Software, with ongoing O&M services and professional services.
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In accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , we recognized revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for promised goods or services. We apply the following five-step revenue recognition model in accounting for our revenue arrangements:
• identification of the contract(s) with the customer, including whether collectability of the consideration is probable by considering the customers’ ability and intention to pay;
• identification of the performance obligations in the contract;
• determination of the transaction price;
• allocation of the transaction price to the performance obligations in the contract; and
• recognition of revenue when, or as, we satisfy a performance obligation.
Each of our significant performance obligations and our application of ASC 606 to our revenue arrangements is discussed in further detail below.
Palantir Cloud
Our Palantir Cloud subscriptions grant customers the right to access the software functionality in a hosted environment controlled by Palantir and are also sold together with stand-ready O&M services. We agree to provide continuous access to our hosted software platforms throughout the contract term. Revenue associated with Palantir Cloud subscriptions is generally recognized over the contract term on a ratable basis, which is consistent with the transfer of control of the Palantir Cloud services to the customer.
On-Premises Software
Sales of our software licenses, primarily term licenses, grant customers the right to use functional intellectual property, either on their internal hardware infrastructure or on their own cloud instance, over the contractual term and are also sold together with stand-ready O&M services. The O&M services include critical updates, support, and maintenance services required to operate our software and, as such, are necessary for our software to maintain its intended utility over the contractual term. Because of this requirement, we have concluded that the software licenses and O&M services, which together we refer to as our On-Premises Software, are highly interdependent and interrelated and represent a single distinct performance obligation within the context of the contract. Revenue is generally recognized over the contract term on a ratable basis.
Professional Services
Our professional services support the customers’ use of the software platforms and include, as needed, on-demand user support, user-interface configuration, training, and ongoing ontology and data modeling support. Professional services contracts typically include the provision of on-demand professional services for the duration of the contractual term, which may be coterminous or non-coterminous with a Palantir Cloud subscription or the On-Premises Software. Professional services are on-demand, whereby we perform services throughout the service period; therefore, the revenue is recognized over the related term.
Areas of Judgment and Estimation
Our contracts with customers can include multiple promises to transfer goods or services to the customer. We concluded that the promise to provide a software license is highly interdependent and interrelated with the promise to provide O&M services and such promises are not distinct within the context of our contracts and are accounted for as a single performance obligation for our On-Premises Software.

Recent Accounting Pronouncements
For information on recently issued accounting pronouncements, if any, refer to Note 2. Significant Accounting Policies in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks in the ordinary course of our business, which primarily relate to fluctuations in the value of our investments, interest rates, foreign currency exchange, and inflation.
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Market Risk
As of December 31, 2025, we held publicly-traded equity securities valued at $23.4 million. We have sold, and may continue to sell, some or all of such equity securities. These equity securities are often in early- or growth-stage companies that have minimal public trading history; as such the fair value of these equity securities, and the value of our equity holdings, may fluctuate depending on the financial outcome and prospects of the issuers, as well as global market conditions, including ongoing volatility related to global conflicts, fluctuating interest rates, or the potential or actual imposition of tariffs or other impacts on trade relations.
As of December 31, 2025, we held privately-held equity securities valued at $170.0 million. Valuations of our privately-held equity securities are complex due to, among other things, the lack of liquidity and the lack of readily available market data. Uncertainties in the global economic climate and financial markets, or in the business, financial results, or conditions of companies we hold equity in, could adversely impact the valuations of such companies and, therefore, result in an impairment or downward adjustment in the value of our holdings.
We have and may continue to accept securities as consideration or invest in securities, which may contribute to additional volatility to our consolidated statements of operations.
Interest Rate Risk
Our cash, cash equivalents, restricted cash, and available-for-sale debt securities consist of cash, short-term U.S. Treasury securities, money market funds, and certificates of deposit. The primary objective of our investment activities and strategies are focused on the preservation of capital and supporting our liquidity requirements.
Due to the short-term nature of the financial instruments, we have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates.
Foreign Currency Exchange Risk
Our contracts with customers are primarily denominated in U.S. dollars, with the remaining denominated in foreign currencies. Our expenses are generally denominated in the currencies of the jurisdictions in which we conduct our operations, which are primarily in the United States, United Kingdom, and other countries. Our results of current and future operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in JPY, Euro, and GBP. We have experienced, and may continue to experience, fluctuations in net income as a result of transaction gains or losses related to remeasuring certain asset and liability balances that are denominated in foreign currencies. These exposures may change over time as business practices evolve and economic conditions change. To date, foreign currency transaction gains and losses have not been material to our consolidated financial statements, and we have not engaged in any foreign currency hedging transactions.
Inflation Risk
We do not believe that inflation has had a material effect on our business, results of operations, or financial condition. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition, or results of operations.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX

Page
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42 )
82

Consolidated Balance Sheets
85

Consolidated Statements of Operations
86

Consolidated Statements of Comprehensive Income
87

Consolidated Statements of Equity
88

Consolidated Statements of Cash Flows
89

Notes to Consolidated Financial Statements
90

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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Palantir Technologies Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Palantir Technologies Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 17, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
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Revenue Recognition
Description of the Matter As discussed in Note 2 to the consolidated financial statements, the Company generates revenue from the sale of subscriptions to access its software platforms in the Company’s hosted environment, along with ongoing operations and maintenance (“O&M”) services (“Palantir Cloud”); software licenses, primarily term licenses in the customers’ environments, with ongoing O&M services (“On-Premises Software”); and professional services. Management applies significant judgment in identifying and evaluating any non-standard terms and conditions in customer arrangements which may impact the determination of performance obligations or the timing of revenue recognition.

Auditing revenue recognition was complex and required a significant level of auditor judgment to identify and evaluate non-standard terms and conditions that impact revenue recognition.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls to identify and evaluate terms and conditions and performance obligations in customer arrangements that would impact revenue recognition.
Our substantive procedures included, among others, testing the completeness and accuracy of management’s identification and evaluation of non-standard terms and conditions, reading executed contracts for a sample of revenue transactions, and evaluating whether the Company appropriately applied its revenue recognition policy to the arrangements based on the terms and conditions therein and consistent with U.S. GAAP. We also evaluated the appropriateness of the related disclosures in the consolidated financial statements.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2008.
San Jose, California
February 17, 2026

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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Palantir Technologies Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Palantir Technologies Inc.’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Palantir Technologies Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated February 17, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP
San Jose, California
February 17, 2026
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Palantir Technologies Inc.
Consolidated Balance Sheets
(in thousands, except per share amounts)

As of December 31,
2025 2024
Assets
Current assets:
Cash and cash equivalents $ 1,423,796   $ 2,098,524  
Marketable securities 5,753,247   3,131,463  
Accounts receivable, net 1,042,065   575,048  
Prepaid expenses and other current assets 139,066   129,254  
Total current assets 8,358,174   5,934,289  
Property and equipment, net 51,960   39,638  
Operating lease right-of-use assets 200,105   200,740  
Other assets 290,153   166,217  
Total assets $ 8,900,392   $ 6,340,884  
Liabilities and Equity
Current liabilities:
Accounts payable $ 8,064   $ 103  
Accrued liabilities 355,624   427,046  
Deferred revenue 408,963   259,624  
Customer deposits 357,066   265,252  
Operating lease liabilities 45,864   43,993  
Total current liabilities 1,175,581   996,018  
Deferred revenue, noncurrent 46,216   39,885  
Customer deposits, noncurrent 18   1,663  
Operating lease liabilities, noncurrent 183,474   195,226  
Other noncurrent liabilities 7,092   13,685  
Total liabilities 1,412,381   1,246,477  
Commitments and Contingencies (Note 8)
Palantir's stockholders’ equity:
Common stock, $ 0.001 par value: 20,000,000 Class A shares authorized as of December 31, 2025 and 2024; 2,290,987 and 2,242,389 shares issued and outstanding as of December 31, 2025 and 2024, respectively; 2,700,000 Class B shares authorized as of December 31, 2025 and 2024; 99,200 and 95,401 shares issued and outstanding as of December 31, 2025 and 2024, respectively; and 1,005 Class F shares authorized, issued, and outstanding as of December 31, 2025 and 2024
2,391   2,339  
Additional paid-in capital 10,933,325   10,193,970  
Accumulated other comprehensive income (loss), net 13,942   ( 5,611 )
Accumulated deficit ( 3,562,390 ) ( 5,187,423 )
Total Palantir's stockholders’ equity 7,387,268   5,003,275  
Noncontrolling interests 100,743   91,132  
Total equity 7,488,011   5,094,407  
Total liabilities and equity $ 8,900,392   $ 6,340,884  
The accompanying notes are an integral part of these consolidated financial statements.
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Palantir Technologies Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)

    
Years Ended December 31,
2025 2024 2023
Revenue $ 4,475,446   $ 2,865,507   $ 2,225,012  
Cost of revenue 789,177   565,990   431,105  
Gross profit 3,686,269   2,299,517   1,793,907  
Operating expenses:
Sales and marketing 1,056,859   887,755   744,992  
Research and development 557,677   507,878   404,624  
General and administrative 657,718   593,481   524,325  
Total operating expenses 2,272,254   1,989,114   1,673,941  
Income from operations 1,414,015   310,403   119,966  
Interest income 229,181   196,792   132,572  
Other income (expense), net 14,172   ( 18,022 ) ( 15,447 )
Income before provision for income taxes 1,657,368   489,173   237,091  
Provision for income taxes 22,724   21,255   19,716  
Net income 1,634,644   467,918   217,375  
Less: Net income attributable to noncontrolling interests 9,611   5,728   7,550  
Net income attributable to common stockholders $ 1,625,033   $ 462,190   $ 209,825  
Earnings per share attributable to common stockholders, basic $ 0.69   $ 0.21   $ 0.10  
Earnings per share attributable to common stockholders, diluted $ 0.63   $ 0.19   $ 0.09  
Weighted-average shares of common stock outstanding used in computing earnings per share attributable to common stockholders, basic 2,369,612   2,250,163   2,147,446  
Weighted-average shares of common stock outstanding used in computing earnings per share attributable to common stockholders, diluted 2,565,197   2,450,818   2,297,927  

The accompanying notes are an integral part of these consolidated financial statements.
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Palantir Technologies Inc.
Consolidated Statements of Comprehensive Income
(in thousands)

Years Ended December 31,
2025 2024 2023
Net income $ 1,634,644   $ 467,918   $ 217,375  
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments 10,938   ( 3,386 ) 2,699  
Net unrealized gain (loss) on available-for-sale securities 8,615   ( 3,026 ) 3,435  
Comprehensive income 1,654,197   461,506   223,509  
Less: Comprehensive income attributable to noncontrolling interests 9,611   5,728   7,550  
Comprehensive income attributable to common stockholders $ 1,644,586   $ 455,778   $ 215,959  

The accompanying notes are an integral part of these consolidated financial statements.

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Palantir Technologies Inc.
Consolidated Statements of Equity
(in thousands)

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss), Net Accumulated Deficit Total Palantir’s Stockholders’ Equity Noncontrolling Interests Total Equity
Shares Amount
Balance as of December 31, 2022 2,099,075   $ 2,099   $ 8,427,998   $ ( 5,333 ) $ ( 5,859,438 ) $ 2,565,326   $ 77,111   $ 2,642,437  
Issuance of common stock from the exercise of stock options 46,079   46   218,192   —  —  218,238   —  218,238  
Issuance of common stock upon vesting of restricted stock units (“RSUs”) 54,974   55   ( 55 ) —  —  —  —  — 
Stock-based compensation —  —  476,038   —  —  476,038   —  476,038  
Other comprehensive income —  —  —  6,134   —  6,134   —  6,134  
Other, net —  —  —  —  —  —  743   743  
Net income —  —  —  —  209,825   209,825   7,550   217,375  
Balance as of December 31, 2023 2,200,128   $ 2,200   $ 9,122,173   $ 801   $ ( 5,649,613 ) $ 3,475,561   $ 85,404   $ 3,560,965  

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss), Net Accumulated Deficit Total Palantir’s Stockholders’ Equity Noncontrolling Interests Total Equity
Shares Amount
Balance as of December 31, 2023 2,200,128   $ 2,200   $ 9,122,173   $ 801   $ ( 5,649,613 ) $ 3,475,561   $ 85,404   $ 3,560,965  
Issuance of common stock from the exercise of stock options 99,297   100   745,296   —  —  745,396   —  745,396  
Issuance of common stock from the exercise of stock appreciation rights (“SARs”), net of shares withheld for employee taxes 5,943   6   ( 302,493 ) —  —  ( 302,487 ) —  ( 302,487 )
Issuance of common stock upon release of RSUs and performance-based RSUs (“P-RSUs”) 35,550   35   ( 35 ) —  —  —  —  — 
Repurchases of common stock ( 2,123 ) ( 2 ) ( 64,194 ) —  —  ( 64,196 ) —  ( 64,196 )
Stock-based compensation —  —  693,223   —  —  693,223   —  693,223  
Other comprehensive loss —  —  —  ( 6,412 ) —  ( 6,412 ) —  ( 6,412 )
Net income —  —  —  —  462,190   462,190   5,728   467,918  
Balance as of December 31, 2024 2,338,795   $ 2,339   $ 10,193,970   $ ( 5,611 ) $ ( 5,187,423 ) $ 5,003,275   $ 91,132   $ 5,094,407  

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss), Net Accumulated Deficit Total Palantir’s Stockholders’ Equity Noncontrolling Interests Total Equity
Shares Amount
Balance as of December 31, 2024 2,338,795   $ 2,339   $ 10,193,970   $ ( 5,611 ) $ ( 5,187,423 ) $ 5,003,275   $ 91,132   $ 5,094,407  
Issuance of common stock from the exercise of stock options 25,739   25   129,082   —  —  129,107   —  129,107  
Issuance of common stock upon release of RSUs and P-RSUs 27,259   27   ( 27 ) —  —  —  —  — 
Repurchases of common stock ( 601 ) —  ( 74,985 ) —  —  ( 74,985 ) —  ( 74,985 )
Stock-based compensation —  —  685,285   —  —  685,285   —  685,285  
Other comprehensive income —  —  —  19,553   —  19,553   —  19,553  
Net income —  —  —  —  1,625,033   1,625,033   9,611   1,634,644  
Balance as of December 31, 2025 2,391,192   $ 2,391   $ 10,933,325   $ 13,942   $ ( 3,562,390 ) $ 7,387,268   $ 100,743   $ 7,488,011  

The accompanying notes are an integral part of these consolidated financial statements.
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Palantir Technologies Inc.
Consolidated Statements of Cash Flows
(in thousands)

Years Ended December 31,
2025 2024 2023
Operating activities
Net income $ 1,634,644   $ 467,918   $ 217,375  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 26,145   31,587   33,354  
Stock-based compensation 684,033   691,638   475,903  
Unrealized and realized (gain) loss from marketable securities, net 21,228   19,306   13,160  
Noncash consideration ( 37,244 ) ( 52,521 ) ( 46,609 )
Other operating activities 15,630   66,034   12,764  
Changes in operating assets and liabilities:
Accounts receivable, net ( 450,429 ) ( 211,157 ) ( 106,159 )
Prepaid expenses and other assets 51,979   11,883   ( 2,955 )
Accounts payable and accrued liabilities 4,659   96,793   21,063  
Contract liabilities 238,688   76,796   143,859  
Other liabilities ( 54,860 ) ( 44,412 ) ( 49,572 )
Net cash provided by operating activities 2,134,473   1,153,865   712,183  
Investing activities
Purchases of property and equipment ( 33,882 ) ( 12,634 ) ( 15,114 )
Purchases of marketable securities ( 7,702,060 ) ( 5,395,913 ) ( 5,636,406 )
Proceeds from sales and redemption of marketable securities 5,026,315   5,073,507   2,889,268  

Purchases of privately-held securities ( 72,924 ) ( 5,615 ) —  
Other investing activities ( 1,000 ) —   51,072  
Net cash used in investing activities ( 2,783,551 ) ( 340,655 ) ( 2,711,180 )
Financing activities

Proceeds from the exercise of common stock options 129,107   745,396   218,238  
Repurchases of common stock ( 74,985 ) ( 64,196 ) —  
Taxes paid related to net share settlement of equity awards ( 81,117 ) ( 218,280 ) —  
Other financing activities 85   444   601  
Net cash provided by (used in) financing activities ( 26,910 ) 463,364   218,839  
Effect of foreign exchange on cash, cash equivalents, and restricted cash 7,477   ( 6,745 ) 2,930  
Net increase (decrease) in cash, cash equivalents, and restricted cash ( 668,511 ) 1,269,829   ( 1,777,228 )
Cash, cash equivalents, and restricted cash - beginning of period 2,119,936   850,107   2,627,335  
Cash, cash equivalents, and restricted cash - end of period $ 1,451,425   $ 2,119,936   $ 850,107  

Supplemental disclosures of cash flow information

Noncash investing and financing activities
Accrued taxes related to net share settlement of equity awards $ —   $ 84,207   $ —  

The accompanying notes are an integral part of these consolidated financial statements.
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Palantir Technologies Inc.
Notes to Consolidated Financial Statements

1. Organization
Palantir Technologies Inc. (including its subsidiaries, “Palantir” or the “Company”) was incorporated in Delaware on May 6, 2003. The Company builds and deploys software platforms that serve as the central operating systems for its customers.

2. Significant Accounting Policies
Basis of Presentation and Consolidation
The accompanying consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission regarding annual financial reporting. The accompanying consolidated financial statements include the accounts of Palantir Technologies Inc. and its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Investments in entities where the Company holds at least a 20% ownership interest and has the ability to exercise significant influence over, but does not control, the investee are accounted for using the equity method of accounting. Certain prior year balances have been reclassified to conform to the current year presentation. Such reclassifications did not affect total revenues, income from operations, net income, or cash flows. The Company’s fiscal year ends on December 31.
Use of Estimates
The preparation of the consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods.
Significant estimates and assumptions made in the accompanying consolidated financial statements include, but are not limited to, the identification of performance obligations in customer contracts, the valuation of deferred tax assets and uncertain tax positions, the valuation and recognition of stock-based compensation awards, and the collectability of contract consideration, including accounts receivable. Estimates and judgments are based on historical experience, forecasted events, and various other assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could affect the Company’s financial position and results of operations.
Segments
The Company has two operating segments, commercial and government, which were determined based on the manner in which the chief operating decision maker (“CODM”), who is the Chief Executive Officer, manages the operations of the Company for purposes of allocating resources and evaluating performance. Various factors, including the Company’s organizational and management reporting structure and customer type, were considered in determining these operating segments.
The Company’s operating segments are described below:
• Commercial: This segment primarily serves customers working in non-government industries.
• Government: This segment primarily serves customers that are U.S government and non-U.S. government agencies.
Cash, Cash Equivalents, and Restricted Cash
The Company considers all highly liquid investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents primarily consist of amounts invested in money market funds and U.S. Treasury securities with original maturities of three months or less.
Restricted cash primarily consists of cash and certificates of deposit that are held as collateral against letters of credit and guarantees that the Company is required to maintain for operating lease agreements, certain customer contracts, and other guarantees and financing arrangements.
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Palantir Technologies Inc.
Notes to Consolidated Financial Statements (continued)

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the amounts shown in the consolidated statements of cash flows (in thousands):

As of December 31,
2025 2024 2023
Cash and cash equivalents $ 1,423,796   $ 2,098,524   $ 831,047  
Restricted cash included in prepaid expenses and other current assets 2,518   7,704   370  
Restricted cash included in other assets 25,111   13,708   18,690  
Total cash, cash equivalents, and restricted cash $ 1,451,425   $ 2,119,936   $ 850,107  

Accounts Receivable, Net
Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses. The Company generally grants non-collateralized credit terms to its customers. Allowance for credit losses is based on the Company’s best estimate of probable losses inherent in its accounts receivable portfolio and is determined based on expectations of the customer’s ability to pay by considering factors such as customer type (commercial or government), historical experience, financial position of the customer, age of the accounts receivable, current economic conditions, and reasonable and supportable forward-looking factors about its portfolio and future economic conditions. Accounts receivable are written-off and charged against an allowance for credit losses when the Company has exhausted collection efforts without success. Based upon the Company’s assessment, the allowance for credit losses was immaterial as of December 31, 2025 and 2024.
Debt Securities
Debt securities are primarily comprised of U.S. Treasury securities. The debt securities are classified as available-for-sale at the time of purchase and are reevaluated as of each balance sheet date. The Company considers the majority of its available-for-sale debt securities as available for use in current operations and may sell these securities at any time, and therefore classifies these securities as current assets in its consolidated balance sheets. Debt securities included in marketable securities on the consolidated balance sheets consist of U.S. Treasury securities with original maturities of greater than three months at the time of purchase, and the remaining U.S. Treasury securities are included in cash and cash equivalents. Interest income on debt securities is included in other income (expense), net on the consolidated statements of operations.
The majority of the Company’s available-for-sale securities are recorded at fair value each reporting period using quoted prices of similar instruments and are classified within Level 2 of the fair value hierarchy. The Company evaluates investments with unrealized loss positions by assessing if they are related to deterioration in credit risk and whether it expects to recover the entire amortized cost basis of the security, the Company’s intent to sell, and whether it is more likely than not that the Company will be required to sell the securities before the recovery of their cost basis. Credit-related impairment losses, not to exceed the amount that fair value is less than the amortized cost basis, are recognized in other income (expense), net in the consolidated statements of operations. Unrealized gains and non-credit related losses are reported as a separate component of accumulated other comprehensive income (loss), net in the consolidated balance sheets until realized. Realized gains and losses and declines in value are determined based on the specific identification method and are reported in other income (expense), net in the consolidated statements of operations.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, accounts receivable, marketable securities, and privately-held equity securities. Cash equivalents primarily consist of money market funds and U.S. Treasury securities with original maturities of three months or less, which are invested primarily with U.S. financial institutions. Cash deposits with financial institutions, including restricted cash, generally exceed federally insured limits. Management believes minimal credit risk exists with respect to these financial institutions and the Company has not experienced any losses on such amounts.
The Company is exposed to concentrations of credit risk with respect to accounts receivable presented in the consolidated balance sheets. The Company’s accounts receivable balances as of December 31, 2025 and 2024 were $ 1.0 billion and $ 0.6 billion, respectively. Customer I represented 25 % and 26 % of total accounts receivable as of December 31, 2025 and 2024, respectively, and no other customer represented more than 10% of total accounts receivable as of December 31, 2025 or 2024. 
For the years ended December 31, 2025, 2024, and 2023, no customer represented 10% or more of total revenue.
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Palantir Technologies Inc.
Notes to Consolidated Financial Statements (continued)

Property and Equipment, Net
Property and equipment, net are stated at cost less accumulated depreciation and amortization. Depreciation is recognized using the straight-line method over the estimated useful lives of the respective assets, which are generally three years . Leasehold improvements are capitalized and amortized using the straight-line method over the shorter of the remaining lease term or the estimated useful life, which is generally five years . Maintenance and repairs that do not improve or extend the useful lives of the assets are expensed when incurred. Upon sale or retirement of assets, the cost and related accumulated depreciation and amortization are derecognized from the consolidated balance sheets and any resulting gain or loss is recorded in the consolidated statements of operations in the period realized.
Privately-held Equity Securities
Equity securities in privately-held companies without readily determinable fair values are recorded using the measurement alternative. Such investments are carried at cost, less any impairments, and are adjusted for subsequent observable price changes in orderly transactions for identical or similar investments of the same issuer. Changes in the basis of the equity securities are recognized in other income (expense), net in the consolidated statements of operations.
Impairment of Long-Lived Assets
Long-lived assets are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount of an asset to the future undiscounted cash flows that the asset is expected to generate. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Impairments of long-lived assets during the years ended December 31, 2025, 2024, and 2023 were not material.
Leases
The Company determines if an arrangement is a lease at inception. An arrangement is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If a lease is identified, classification is determined at lease commencement. Operating lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The Company’s leases do not provide an implicit interest rate and therefore the Company estimates its incremental borrowing rate to discount lease payments. The incremental borrowing rate reflects the interest rate that the Company would have to pay to borrow on a collateralized basis an amount equal to the lease payments in a similar economic environment over a similar term. Operating lease right-of-use (“ROU”) assets are based on the corresponding lease liability adjusted for any lease payments made at or before commencement, initial direct costs, and lease incentives. Renewals or early terminations are not accounted for unless the Company is reasonably certain to exercise these options. Operating lease expense is recognized and the ROU asset is amortized on a straight-line basis over the lease term.
The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. For short-term leases, defined as leases with a term of twelve months or less, the Company elected the practical expedient to not recognize an associated lease liability and ROU asset. Lease payments for short-term leases are expensed on a straight-line basis over the lease term.
Operating leases are included in operating lease right-of-use assets, operating lease liabilities, and operating lease liabilities, non-current on the Company’s consolidated balance sheets. Finance leases are not material.
Fair Value Measurement
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, or an exit price, in the principal or most advantageous market for that asset or liability in an orderly transaction between market participants on the measurement date.
The Company measures fair value based on a three-level hierarchy of inputs, maximizing the use of observable inputs, where available, and minimizing the use of unobservable inputs when measuring fair value. A financial instrument’s level within the three-level hierarchy is based on the lowest level of input that is significant to the fair value measurement. The three-level hierarchy of inputs is as follows:
Level 1: Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;
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Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs are based on the Company’s own assumptions about current market conditions and require significant management judgment or estimation.
Financial instruments consist of money market funds and certificates of deposit included in cash equivalents and restricted cash, accounts receivable, marketable securities, other assets accounted for at fair value, accounts payable, and accrued liabilities. Money market funds, certificates of deposit, and marketable securities are stated at fair value on a recurring basis. Accounts receivable, accounts payable, and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date.
Revenue Recognition
The Company generates revenue from the sale of subscriptions to access its software platforms in the Company’s hosted environment, along with ongoing operations and maintenance (“O&M”) services (“Palantir Cloud”); software licenses, primarily term licenses in the customers’ environments, with ongoing O&M services (“On-Premises Software”); and professional services.
In accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , the Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services. The Company applies the following five-step revenue recognition model in accounting for its revenue arrangements:
• Identification of the contract(s) with the customer, including whether collectability of the consideration is probable by considering the customers’ ability and intention to pay;
• Identification of the performance obligations in the contract;
• Determination of the transaction price;
• Allocation of the transaction price to the performance obligations in the contract; and
• Recognition of revenue when, or as, the Company satisfies a performance obligation.
Additionally, the pricing of the Company’s contracts is generally fixed; however, it is possible for contracts to include variable consideration, which can be based on subjective or objective criteria. The Company includes the estimated amount of variable consideration that it expects to receive to the extent it is probable that a significant revenue reversal will not occur.
Each of the Company’s significant performance obligations and the Company’s application of ASC 606 to its revenue arrangements is discussed in further detail below.
Palantir Cloud
The Company’s Palantir Cloud subscriptions grant customers the right to access the software functionality in a hosted environment controlled by Palantir and are sold together with stand-ready O&M services, as further described below. The Company agrees to provide continuous access to its hosted software platforms throughout the contract term. Revenue associated with Palantir Cloud subscriptions is generally recognized over the contract term on a ratable basis, which is consistent with the transfer of control of the Palantir Cloud subscription to the customer.
On-Premises Software
Sales of the Company’s software licenses, primarily term licenses, grant customers the right to use functional intellectual property, either on their internal hardware infrastructure or on their own cloud instance, over the contractual term and are also sold together with stand-ready O&M services. The O&M services include critical updates, support, and maintenance services required to operate the software and, as such, are necessary for the software to maintain its intended utility over the contractual term. Because of this requirement, the Company has concluded that the software licenses and O&M services, which together the Company refers to as On-Premises Software, are highly interdependent and interrelated and represent a single distinct performance obligation within the context of the contract. Revenue is generally recognized over the contract term on a ratable basis.
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Professional Services
The Company’s professional services support the customers’ use of the software platforms and include, as needed, on-demand user support, user-interface configuration, training, and ongoing ontology and data modeling support. Professional services contracts typically include the provision of on-demand professional services for the duration of the contractual term, which may be coterminous or non-coterminous with a Palantir Cloud subscription or the On-Premises Software. Professional services are on-demand, whereby the Company performs services throughout the service period; therefore, the revenue is recognized over the related term.
Contract Liabilities
The timing of customer billings and payments relative to the start of the service period varies from contract to contract; however, the Company bills many of its customers in advance of the provision of services under its contracts, resulting in contract liabilities consisting of either deferred revenue or customer deposits (“contract liabilities”). Deferred revenue represents billings under noncancelable contracts before the related product or service is transferred to the customer. Customer deposits consist of amounts billed and/or paid in advance of the start of the contractual term or for anticipated revenue generating activities for the portion of a contract term that is subject to cancellation by its customers. Many of the Company’s arrangements include terms that allow the customer to terminate the contract for convenience and receive a pro-rata refund of the amount of the customer deposit for the period of time remaining in the contract term after the applicable termination notice period expires. In these arrangements, the Company concluded there are no enforceable rights and obligations after such notice period and therefore the consideration received or due from the customer that is subject to termination for convenience is recorded as customer deposits.
The payment terms and conditions vary by contract; however, the Company’s terms generally require payment within 30 to 60 days from the invoice date. In instances where the timing of revenue recognition differs from the timing of payment, the Company elected to apply the practical expedient in accordance with ASC 606 to not adjust contract consideration for the effects of a significant financing component as the Company expects, at contract inception, that the period between when promised goods and services are transferred to the customer and when the customer pays for those goods and services will be one year or less. As such, the Company determined its contracts do not generally contain a significant financing component.
Areas of Judgment and Estimation
The Company’s contracts with customers can include multiple promises to transfer goods or services to the customer. The Company concluded that the promise to provide a software license is highly interdependent and interrelated with the promise to provide O&M services and such promises are not distinct within the context of its contracts and are accounted for as a single performance obligation as the Company’s On-Premises Software.
Significant estimates and assumptions are used in the identification of performance obligations in customer contracts and collectability of contract consideration, including accounts receivable. Estimates and judgments are based on historical experience, forecasted events, and various other assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could affect our financial position and results of operations.
Costs to Obtain and Fulfill Contracts
Incremental costs of obtaining a contract include only those costs that are directly related to the acquisition of contracts, including sales commissions, and that would not have been incurred if the contract had not been obtained. The Company recognizes a contract cost asset for the incremental costs of obtaining a contract with a customer if it is expected that the economic benefit and amortization period will be longer than one year. Costs to obtain contracts were not material in the periods presented.
The Company recognizes an asset for the costs to fulfill a contract with a customer if the costs are specifically identifiable, generate or enhance resources used to satisfy future performance obligations, and are expected to be recovered. Costs to fulfill contracts were not material in the periods presented.
Software Development Costs
The Company evaluates capitalization of certain software development costs subsequent to the establishment of technological feasibility. Based on the Company’s product development process and substantial development risks, technological feasibility is generally established for the Company’s products when they are made available for general release. Accordingly, most costs are charged to research and development expense in the period incurred.
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Cost of Revenue
Cost of revenue primarily includes salaries, stock-based compensation expense, and benefits for personnel involved in performing O&M and professional services, as well as subcontractor expenses, field-service representatives, third-party cloud hosting services, hardware costs, and other direct costs.
Sales and Marketing Costs
Sales and marketing costs primarily include salaries, stock-based compensation expense, variable compensation, including commissions, and benefits for the sales force and personnel involved in sales functions, executing on pilots, and customer growth activities, as well as third-party cloud hosting services for pilots, and marketing and sales event-related costs. The Company generally charges all such costs to sales and marketing expense in the period incurred. Advertising costs are expensed as incurred and included in sales and marketing expense within the consolidated statements of operations. Advertising expense totaled $ 16.0 million, $ 18.2 million, and $ 21.4 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Research and Development Costs
Research and development costs primarily include salaries, stock-based compensation expense, and benefits for personnel involved in performing the activities to develop and refine the Company’s platforms and products, as well as third-party cloud hosting services and other IT-related costs. Research and development costs are expensed as incurred.
Contingencies
Liabilities for loss contingencies arising from claims, disputes, legal proceedings, fines and penalties, and other sources are recorded when it is probable that a liability has been or will be incurred and the amount of the liability can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. Recoveries of such legal costs from insurance policies are recorded as an offset to legal expenses in the period they are received.
Stock-Based Compensation
The Company accounts for stock-based compensation expense in accordance with the fair value recognition and measurement provisions of GAAP, which require compensation cost for the grant-date fair value of stock-based awards to be recognized over the requisite service period. The Company determines the fair value of stock-based awards granted or modified on the grant date or modification date using appropriate valuation techniques. The assumptions used to determine the grant-date fair value of the awards represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. The Company recognizes forfeitures as they occur.
Service-Based Awards
The Company grants awards, including RSUs, stock option awards, and SARs, which vest based upon the satisfaction of a service condition. For such awards, the Company records stock-based compensation expense on a straight-line basis over the requisite service periods. The Company determines the grant-date fair value of the RSUs based on the fair value of the Company’s common stock on the grant date. For stock option awards and SARs that vest over an explicit service period and are exercisable at expiration, during a limited window (“Time-Vesting SARs”), the Company uses the Black-Scholes-Merton (“Black-Scholes”) option pricing model to determine the grant-date fair value of the awards. The Black-Scholes option pricing model requires the input of highly subjective assumptions, including the expected term of the award, the expected volatility rate, risk-free interest rate, and the expected dividend yield of the common stock.
Performance-Based Awards
The Company also grants awards, including RSUs, that vest upon the satisfaction of both a service condition and a performance condition. The Company determines the grant-date fair value of P-RSUs based on the fair value of the Company’s common stock on the grant date and records stock-based compensation expense using the accelerated attribution method over the service period. The Company recognizes expense for the number of P-RSUs expected to vest, determined based on the level of achievement against certain performance conditions, over the requisite service period when it is probable that the performance condition will be achieved.
Income Taxes
The Company estimates its current tax expense together with assessing temporary differences resulting from differing treatment of items not currently deductible for tax purposes. These differences result in deferred tax assets and liabilities on the Company’s consolidated balance sheets, which are estimated based upon the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates that will be in effect when these differences reverse. In general,
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deferred tax assets represent future tax benefits to be received when certain expenses previously recognized in the Company’s consolidated statements of operations become deductible expenses under applicable income tax laws or loss or credit carryforwards are utilized. Accordingly, the realization of the Company’s deferred tax assets is dependent on future taxable income against which these deductions, losses, and credits can be utilized.
The Company evaluates the realizability of its deferred tax assets on a regular basis and recognizes a valuation allowance when it is more likely than not that a future benefit on such deferred tax assets will not be realized. During such evaluation, the Company weighs all available positive and negative evidence, including temporary and permanent differences by jurisdiction, especially those related to excess tax benefits from stock-based compensation, scheduled reversals of deferred tax liabilities, its earning history and results of operations, and tax planning strategies. Additionally, the Company evaluates its projected future results of business operations, considering any uncertainty in future operating results relative to historical results, volatility in the market price and performance of the Company’s Class A common stock over time, variable macroeconomic conditions impacting the Company’s ability to forecast future taxable income, and changes in business that may affect the existence and magnitude of future taxable income. If certain factors change and the Company determines that the deferred tax assets are realizable at a more-likely-than not level, it will adjust the valuation allowance in the period the determination is made. Changes in the valuation allowance, when recorded, would be included in the Company’s consolidated statements of operations. Management’s judgment is required in determining the Company’s valuation allowance recorded against its net deferred tax assets.
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and penalties related to uncertain tax positions in its provision for income taxes. The Company is subject to the Global Intangible Low Taxed Income (“GILTI”) tax in the U.S. and has elected to treat taxes on future GILTI inclusions as current period expense if and when incurred.
Earnings Per Share Attributable to Common Stockholders
The Company computes earnings per share attributable to its common stockholders using the two-class method required for participating securities, which determines earnings per common share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in distributed and undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.
The rights, including the liquidation and dividend rights, of the holders of Class A, Class B, and Class F common stock (collectively, the “common stock”) are identical, except with respect to voting and conversion. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis and the resulting earnings per share will, therefore, be the same for all classes of common stock on an individual or comb ined basis. As such, the Company has presented the net income attributed to its common stock on a combined basis.
Noncontrolling Interests
A noncontrolling interest represents the proportionate equity interest in a subsidiary that is not attributable, either directly or indirectly, to the Company and is reported as equity of the Company, separate from the Company’s controlling interest. Revenues, expenses, gains, losses, net income, and other comprehensive income are reported in the consolidated financial statements at the consolidated amounts, which include the amounts attributable to both the controlling and noncontrolling interests.
Foreign Currency
Generally, the functional currency of the Company’s international subsidiaries is the local currency of the country in which they operate. The Company translates the assets and liabilities of its non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each reporting period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized as a cumulative translation adjustment and included in accumulated other comprehensive income.
For transactions that are not denominated in the local functional currency, the Company remeasures monetary assets and liabilities at exchange rates in effect at the end of each reporting period. Transaction gains and losses from the remeasurement are recognized in other income (expense), net within the consolidated statements of operations.
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Recently Adopted Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-09, Income Taxes – Improvements to Income Tax Disclosures , requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. The Company adopted this standard update effective December 31, 2025 using a prospective approach and included the required disclosures in Note 11. Taxes . This standard update did not affect the Company’s operating results.
Recent Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures, which requires the disclosure of additional information about specific expense categories in the notes to the consolidated financial statements on an annual and interim basis. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027 on either a prospective or retrospective basis, with early adoption permitted. The Company is currently evaluating the impacts of the new standard on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software , which simplifies the capitalization guidance related to internal-use software by removing all references to software development project stages so the guidance is neutral to different software development methods. This ASU is effective for fiscal years beginning after December 15, 2027, including interim periods within those annual reporting periods, with early adoption permitted and can be applied using a prospective, retrospective, or modified transition approach. The Company is currently evaluating the impacts of the new standard on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging and Revenue from Contracts with Customers , which refines the scope of the guidance on derivatives in ASC 815 and clarifies the guidance on share-based payments from a customer in ASC 606. This ASU is effective for fiscal years beginning after December 15, 2026, including interim periods within those annual reporting periods, with early adoption permitted. The guidance can be applied prospectively to new contracts entered into on or after the date of adoption or on a modified retrospective basis for contracts existing as of the beginning of the annual reporting period of adoption. The Company is currently evaluating the impacts of the new standard on its consolidated financial statements.

3. Contract Liabilities and Remaining Performance Obligations
Contract Liabilities
The Company’s contract liabilities consist of deferred revenue and customer deposits. As of December 31, 2025 and 2024, the Company’s contract liabilities were $ 812.3 million and $ 566.4 million, respectively. Revenue of $ 526.6 million and $ 457.6 million was recognized during the years ended December 31, 2025 and 2024, respectively, that was included in contract liabilities as of December 31, 2024 and 2023, respectively.
Remaining Performance Obligations
The Company’s arrangements with its customers often have terms that span over multiple years. However, the Company allows many of its customers to terminate contracts for convenience prior to the end of the stated term with less than twelve months’ notice. Revenue allocated to remaining performance obligations represents noncancelable contracted revenue that has not yet been recognized, which includes deferred revenue and, in certain instances, amounts that will be invoiced. The Company has elected the practical expedient allowing the Company to not disclose remaining performance obligations for contracts with original terms of twelve months or less. Cancelable contracted revenue, which includes customer deposits, is not considered a remaining performance obligation.
The Company’s remaining performance obligations were $ 4.1 billion as of December 31, 2025, of which the Company expects to recognize approximately 38 % as revenue over the next 12 months, 36 % as revenue over the subsequent 13 to 36 months, and the remainder thereafter.
Disaggregation of Revenue
See Note 13. Segment and Geographic Information for disaggregated revenue by customer segment and geographic region.
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4. Investments and Fair Value Measurements
The following tables present the Company’s assets that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation (in thousands):

As of December 31, 2025
Total Level 1 Level 2 Level 3
Assets:
Cash and cash equivalents:
Money market funds $ 945,330   $ 945,330   $ —   $ —  
Prepaid expenses and other current assets and other assets:
Certificates of deposit 4,846   —   4,846   —  
Marketable securities:
U.S. Treasury securities 5,729,892   —   5,729,892   —  
Publicly-traded equity securities 23,355   23,355   —   —  
Total $ 6,703,423   $ 968,685   $ 5,734,738   $ —  

As of December 31, 2024
Total Level 1 Level 2 Level 3
Assets:
Cash and cash equivalents:
Money market funds $ 1,823,046   $ 1,823,046   $ —   $ —  
Prepaid expenses and other current assets and other assets:
Certificates of deposit 4,826   —   4,826   —  
Marketable securities:
U.S. Treasury securities 3,110,687   —   3,110,687   —  
Publicly-traded equity securities 20,776   20,776   —   —  
Total $ 4,959,335   $ 1,843,822   $ 3,115,513   $ —  

Debt Securities
As of December 31, 2025 and 2024, available-for-sale debt securities, all of which are included in marketable securities on the consolidated balance sheet, consisted of the following (in thousands):

As of December 31, 2025
Amortized Cost Unrealized Gains Unrealized Losses Fair Value
U.S. Treasury securities $ 5,720,869   $ 9,158   $ ( 135 ) $ 5,729,892  
Total debt securities $ 5,720,869   $ 9,158   $ ( 135 ) $ 5,729,892  

As of December 31, 2024
Amortized Cost Unrealized Gains Unrealized Losses Fair Value
U.S. Treasury securities $ 3,110,278   $ 1,022   $ ( 613 ) $ 3,110,687  
Total debt securities $ 3,110,278   $ 1,022   $ ( 613 ) $ 3,110,687  

The Company sold $ 279.7  million and $ 694.6  million of available-for-sale debt securities during the fiscal years ended December 31, 2025 and 2023. The realized gains and losses from those sales were immaterial. The Company did not sell any
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available-for-sale debt securities during the fiscal year ended December 31, 2024. As of December 31, 2025 and 2024, available-for-sale debt securities of $ 724.9  million and $ 716.3  million, respectively, were in an unrealized loss position primarily due to unfavorable changes in interest rates subsequent to initial purchase. None of the available-for-sale debt securities held as of December 31, 2025 or 2024 were in a continuous unrealized loss position for greater than 12 months and it is more likely than not that the Company will hold the securities until maturity or a recovery of the cost basis. We did not recognize any credit losses related to our available-for sale debt securities during the years end December 31, 2025 and 2024. All of the Company’s U.S. Treasury securities had contractual maturities due within one year as of December 31, 2025 and 2024.
Equity Securities
The Company holds equity securities in publicly-traded companies, which are recorded at fair market value each reporting period in marketable securities on the consolidated balance sheets. Realized and unrealized gains and losses are recorded in other income (expense), net on the consolidated statements of operations. For the years ended December 31, 2025, 2024, and 2023, net unrealized gains and losses from publicly-traded equity securities held at the end of each period were immaterial.
The Company also holds equity securities in privately-held companies without readily determinable fair values that are recorded using the measurement alternative. As of December 31, 2025 and December 31, 2024, the total amount of privately-held equity securities included in other assets on the consolidated balance sheets was $ 170.0 million and $ 64.9 million, respectively. The Company classifies these fair value measurements as Level 3 within the fair value hierarchy. There were upward adjustments on privately-held equity securities based on observable transactions of $ 30.7 million during the year ended December 31, 2025, and no upward adjustments on privately-held equity securities during the year ended December 31, 2024. There were no material downward adjustments or impairments for the privately-held equity securities held as of December 31, 2025 or 2024. Cumulative upward adjustments were $ 30.7 million and cumulative downward adjustments and impairments were not material on privately-held equity securities held by the Company as of December 31, 2025.
Additionally, we have accepted, and may continue to accept, securities as noncash consideration. Total equity securities received as noncash consideration was $ 38.9 million, $ 58.7 million, and $ 41.7 million during the years ended December 31, 2025, 2024, and 2023, respectively.
Strategic Commercial Contracts
From 2021 through 2022, the Company approved and entered into certain agreements (“Investment Agreements”) to purchase shares of various entities, including special purpose acquisition companies and/or other privately-held or publicly-traded entities (each, an “Investee,” and such purchases, the “Investments”). No Investments were purchased under such Investment Agreements during the fiscal years ended December 31, 2025 or 2024.
In connection with signing the Investment Agreements, each Investee or an associated entity and the Company entered into a commercial contract for access to the Company’s products and services (collectively, the “Strategic Commercial Contracts”). The Company assessed the concurrent agreements under the noncash consideration and consideration payable to a customer guidance within ASC 606, Revenue from Contracts with Customers, as well as the commercial substance of each arrangement considering the customer’s ability and intention to pay as well as the Company’s obligation to perform under each contract. The Company performs ongoing assessments of customers’ financial condition, including the consideration of customers’ ability and intention to pay, and whether all or some portion of the value of such contracts continue to meet the criteria for revenue recognition, among other factors. During the years ended December 31, 2025, 2024, and 2023, revenue recognized from Strategic Commercial Contracts was $ 15.3 million, $ 52.3 million, and $ 87.3 million, respectively.
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5. Balance Sheet Components
Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):

As of December 31,
2025 2024
Leasehold improvements $ 98,302   $ 85,284  
Computer equipment, software, and other 77,315   55,815  
Furniture and fixtures 15,435   13,906  
Construction in progress 9,999   7,632  
Total property and equipment, gross 201,051   162,637  
Less: accumulated depreciation and amortization ( 149,091 ) ( 122,999 )
Total property and equipment, net $ 51,960   $ 39,638  

Depreciation and amortization expense related to property and equipment, net was not material for the years ended December 31, 2025, 2024, and 2023.
Accrued Liabilities
Accrued liabilities consisted of the following (in thousands):

As of December 31,
2025 2024
Accrued payroll and related expenses $ 178,659   $ 306,939  

Accrued other liabilities 176,965   120,107  
Total accrued liabilities $ 355,624   $ 427,046  

6. Debt
2014 Credit Facility
The Company has a secured revolving credit facility, which provides for aggregate revolving commitments of $ 500.0 million and has a maturity date of March 31, 2027 (as amended, the “2014 Credit Facility”). As of December 31, 2025, the Company had no outstanding debt balances under the 2014 Credit Facility.
The 2014 Credit Facility contains customary representations and warranties, and certain financial and nonfinancial covenants, including but not limited to maintaining minimum liquidity of $ 50.0 million, and certain limitations on liens and indebtedness. The Company was in compliance with all covenants associated with the 2014 Credit Facility as of December 31, 2025.

7. Leases
The Company has operating leases primarily for corporate office space. Certain lease agreements contain renewal options, rent abatement, and escalation clauses that are factored into our determination of lease payments when appropriate. The Company's leases have remaining terms up to March 2035, some of which include one or more options to extend. Additionally, some lease contracts include termination options.
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Supplemental balance sheet information related to lease liabilities at December 31, 2025 and 2024 was as follows (in thousands):

As of December 31,
Lease-Related Assets and Liabilities Financial Statement Line Items 2025 2024
Right-of-use assets:
Operating leases Operating lease right-of-use assets $ 200,105   $ 200,740  
Total right-of-use assets $ 200,105   $ 200,740  
Lease liabilities:
Operating leases Operating lease liabilities $ 45,864   $ 43,993  
Operating lease liabilities, noncurrent 183,474   195,226  
Total lease liabilities $ 229,338   $ 239,219  

The components of lease expense included in the Company's consolidated statements of operations include (in thousands):

Years Ended December 31,
2025 2024 2023
Operating lease expense $ 57,164   $ 57,655   $ 61,972  
Short-term lease expense 4,461   3,445   4,949  
Variable lease expense 5,636   5,585   4,772  
Sublease income ( 15,966 ) ( 17,205 ) ( 18,905 )
Total lease expense, net $ 51,295   $ 49,480   $ 52,788  

Variable lease costs are primarily related to payments made to lessors for common area maintenance, property taxes, insurance, and other operating expenses. Short-term lease costs primarily represent temporary employee housing.
Maturities of operating lease liabilities as of December 31, 2025 were as follows (in thousands):

As of December 31, 2025
Operating Lease Commitments Less: Sublease Income Net Lease Commitments
Year ended December 31,
2026 $ 62,079   $ 13,786   $ 48,293  
2027 50,428   14,423   36,005  
2028 29,555   12,470   17,085  
2029 24,943   10,254   14,689  
2030 33,319   10,254   23,065  
Thereafter 92,215   10,254   81,961  
Total undiscounted liabilities 292,539   71,441   221,098  

Less: Imputed interest ( 63,201 ) —   ( 63,201 )
Total operating lease liabilities $ 229,338   $ 71,441   $ 157,897  

The weighted-average remaining lease term related to the Company’s operating lease liabilities as of December 31, 2025 and 2024 was six and seven years , respectively. The weighted-average discount rate related to the Company’s operating lease liabilities as of December 31, 2025 and 2024 was 7 %.
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The following table sets forth the supplemental information related to the Company's operating leases for the years ended December 31, 2025 and 2024 (in thousands):

Years Ended December 31,
2025 2024
Cash paid for operating lease liabilities $ 63,818   $ 65,402  
Lease liabilities arising from obtaining right-of-use assets
$ 37,784   $ 58,320  

8. Commitments and Contingencies
Purchase Commitments
The Company has commitments with various third parties to purchase cloud hosting services. Under one of its third-party cloud services agreements, as amended, the Company has committed to spend at least $ 1.95 billion over ten contract years through September 30, 2033, among other things. As of December 31, 2025, the Company satisfied $ 79.2  million of its $ 170.2 million commitment for the contract year beginning October 1, 2025 and ending September 30, 2026.
Litigation and Legal Proceedings
The Company has been, is currently party to, and may, from time to time, be subject to various legal proceedings, claims, disputes, government investigations, or similar matters arising in the normal course of business. These may include proceedings, claims, disputes, allegations, or investigations related to, but not limited to, intellectual property; employment; securities; investors; taxes; class actions; contract or breach of contract; tort; warranty; refund; breach, leak, or misuse of personal data or confidential information; government procurement; government regulation or compliance; or other matters. The Company evaluates associated developments on a regular basis and establishes an accrual for loss contingencies when the loss is both probable and reasonably estimable.
On September 15, 2022, October 25, 2022, and November 4, 2022, putative securities class action complaints were filed in the United States District Court for the District of Colorado, captioned Cupat v. Palantir Technologies Inc., et al., Case No. 1:22-cv-02384, Allegheny County Employees’ Retirement System v. Palantir Technologies, Inc., et al., Case No. 1:22-cv-02805, and Shijun Liu, Individually and as Trustee of the Liu Family Trust 2019 v. Palantir Technologies Inc., et al., Case No. 1:22-cv-02893, respectively, naming the Company and certain current and former officers and directors as defendants. The suits allege false and misleading statements about our business and prospects, and purport to allege claims under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Securities Act of 1933, as amended (the “Securities Act”), and seek unspecified damages and remedies under Sections 10(b), 20(a), and 20(A) of the Exchange Act and Sections 11 and 15 of the Securities Act. These three actions subsequently were consolidated as Cupat v. Palantir Technologies Inc., et al., Lead Civil Action No. 1:22-cv-02834-CNS-SKC, consolidated with civil actions 1:22-cv-02805-CNS-SKC and 1:22-cv-02893-CNS-SKC. On March 31, 2024, the Court dismissed the Cupat matter without prejudice. On May 24, 2024, plaintiffs filed a second amended complaint. On April 4, 2025, the Court dismissed the Cupat matter with prejudice and entered judgment for the defendants on the same day. On May 2, 2025, plaintiffs filed a Notice of Appeal from the final judgment with the United States Court of Appeals for the Tenth Circuit.
As of December 31, 2025, the Company was not aware of any currently pending legal matters or claims, individually or in the aggregate, that were expected to have a material adverse impact on its consolidated financial statements.
Warranties and Indemnification
The Company generally provides a warranty for its software products and services and a service level agreement (“SLA”) for the Company’s performance of software operations. The Company’s products are generally warranted to perform substantially as described in the associated product documentation during the subscription term or for a period of up to 90 days where the software is hosted by the customer, and the Company includes O&M services as part of its subscription and license agreements to support this warranty and maintain the operability of the software. The Company’s services are generally warranted to be performed in a professional manner and by an adequate staff with knowledge about the products. In the event there is a failure of such warranties, the Company generally is obligated to correct the product or service to conform to the warranty provision or, if the Company is unable to do so, the customer is entitled to seek a refund of the purchase price of the product and service (generally prorated over the contract term). Due to the absence of historical warranty claims, the Company’s expectations of future claims related to products under warranty continue to be insignificant. The Company has not recorded warranty expense or related accruals as of December 31, 2025 and 2024.
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The Company generally agrees to indemnify its customers against legal claims that the Company’s software products infringe certain third-party intellectual property rights and accounts for its indemnification obligations. In the event of such a claim, the Company is generally obligated to defend its customer against the claim and to either settle the claim at the Company’s expense or pay damages that the customer is legally required to pay to the third-party claimant. In addition, in the event of an infringement, the Company generally agrees to secure the right for the customer to continue using the infringing product; to modify or replace the infringing product; or, if those options are not commercially practicable, to refund the cost of the software, as prorated over the period. To date, the Company has not been required to make any payment resulting from infringement claims asserted against its customers and does not believe that the Company will be liable for such claims in the foreseeable future. As such, the Company has not recorded a liability for infringement costs as of December 31, 2025 and 2024.
The Company has obligations under certain circumstances to indemnify each of the defendant directors and certain officers against judgments, fines, settlements, and expenses related to claims against such directors and certain officers and otherwise to the fullest extent permitted under the law and the Company’s Amended and Restated Bylaws and Amended and Restated Certificate of Incorporation.

9. Stockholders’ Equity
The Company’s Class A, Class B, and Class F common stock (collectively, the “common stock”) all have the same rights, except with respect to voting and conversion rights. Class A and Class B common stock have voting rights of 1 and 10 votes per share, respectively. The Class F common stock has the voting rights generally described herein and each share of Class F common stock is convertible at any time, at the option of the holder thereof, into one share of Class B common stock. All shares of Class F common stock are held in a voting trust established by Stephen Cohen, Alexander Karp, and Peter Thiel (the “Founders”). The Class F common stock generally gives the Founders the ability to control up to 49.999999 % of the total voting power of the Company’s capital stock, so long as the Founders and certain of their affiliates collectively meet a minimum ownership threshold, which was 100.0  million of the Company's equity securities as of December 31, 2025.
Holders of the common stock are entitled to dividends when, as, and if declared by the Company’s Board of Directors, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends. No dividends have been declared as of December 31, 2025.
The following represented the total authorized, issued, and outstanding shares for each class of common stock (in thousands):

As of December 31, 2025 As of December 31, 2024
Authorized Issued and Outstanding Authorized Issued and Outstanding
Class A Common Stock 20,000,000   2,290,987   20,000,000   2,242,389  
Class B Common Stock 2,700,000   99,200   2,700,000   95,401  
Class F Common Stock 1,005   1,005   1,005   1,005  
Total 22,701,005   2,391,192   22,701,005   2,338,795  

Share Repurchase Program
In August 2023, the Company’s Board of Directors authorized a stock repurchase program of up to $ 1.0  billion of the Company’s outstanding shares of Class A common stock (the “Share Repurchase Program”).
Share repurchases were recorded on the trade date and the repurchase price is inclusive of any related fees and commissions. Shares of Class A common stock repurchased by the Company were immediately retired, and upon retirement the par value of the Class A common stock repurchased was deducted from common stock with the excess of repurchase price recorded to additional paid-in capital on the Company’s consolidated balance sheets.
During the year ended December 31, 2025, the Company repurchased and subsequently retired 0.6 million shares of its Class A common stock for an aggregate amount, including commissions, of $ 75.0 million under the Share Repurchase Program. In January 2026, the Company terminated the Share Repurchase Program.
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10. Stock-Based Compensation
2020 Executive Equity Incentive Plan
In August 2020, the Company’s Board of Directors approved the 2020 Executive Equity Incentive Plan (the “Executive Equity Plan”). The Executive Equity Plan permitted the granting of nonstatutory stock options (“NSOs”) and RSUs to the Company’s employees, consultants, and directors. A total of 165,900,000 shares of the Company’s Class B common stock were reserved for issuance under the Executive Equity Plan. During August 2020, options to purchase 162,000,000 shares of Class B common stock and restricted stock units covering 3,900,000 shares of the Company’s Class B common stock were granted to certain officers.
The Executive Equity Plan was terminated prior to the Company’s Direct Listing, and no additional awards will be granted under the Executive Equity Plan. However, the Executive Equity Plan will continue to govern the terms and conditions of the outstanding awards previously granted under the Executive Equity Plan.
2020 Equity Incentive Plan
In September 2020, prior to the Direct Listing, the Company’s Board of Directors approved the 2020 Equity Incentive Plan (“2020 Plan”). The 2020 Plan provides for the grant of incentive stock options (“ISOs”), NSOs, restricted stock, RSUs, SARs, and performance awards to the Company’s employees, directors, and consultants. A total of 150,000,000 shares of the Company’s Class A common stock were initially reserved for issuance pursuant to the 2020 Plan. In addition, the number of shares of Class A common stock reserved for issuance under the 2020 Plan includes certain shares of common stock subject to awards under the 2010 Equity Incentive Plan (“2010 Plan”) and Executive Equity Plan in the case of certain occurrences, such as expirations, terminations, exercise and tax-related withholding, or failures to vest. Shares of Class B common stock added to the 2020 Plan from the 2010 Plan or Executive Equity Plan are reserved for issuance under the Company’s 2020 Plan as Class A common stock. The number of shares of Class A common stock available for issuance under the 2020 Plan will also include an annual increase on the first day of each fiscal year beginning on January 1, 2022, equal to the least of:
• 250,000,000 shares of the Company’s Class A common stock;
• Five percent of the outstanding shares of the Company’s common stock as of the last day of the immediately preceding fiscal year; or
• such other amount as the administrator of the 2020 Plan determines.
Under the 2020 Plan, the exercise price of options granted is generally at least equal to the fair market value of the Company’s Class A common stock on the date of grant. The term of an ISO generally may not exceed ten years . Additionally, the exercise price of any ISO granted to a 10 % stockholder shall not be less than 110 % of the fair market value of the common stock on the date of grant, and the term of such option grant shall not exceed five years . Options and other equity awards become vested and, if applicable, exercisable based on terms determined by the Board of Directors or another plan administrator on the date of grant, which is typically four years for new employees and varies for subsequent grants.
Stock Options and SARs
The following table summarizes stock option and SAR activity for the year ended December 31, 2025 (in thousands, except per share amounts, years, and aggregate intrinsic value):

Options Outstanding SARs Outstanding
Number of Awards Weighted-Average Exercise Price Per Share
Weighted-Average
Remaining Contractual Life (years) Aggregate Intrinsic Value (millions) Number of Awards Weighted-Average Exercise Price Per Share
Weighted-Average
Remaining Contractual Life (years) Aggregate Intrinsic Value (millions)
Balance as of December 31, 2024 178,109   $ 9.26   6.9 $ 11,822   6,437   $ 55.75   6.7 $ 128  
Granted —   —     5,167   219.44    
Exercised ( 25,739 ) 5.02   —   —  
Canceled and forfeited ( 168 ) 6.45     ( 333 ) 82.54    
Balance as of December 31, 2025 152,202   $ 9.98   6.1 $ 25,536   11,271   $ 130.00   7.1 $ 794  
Vested and exercisable as of December 31, 2025 72,552   $ 8.44   5.6 $ 12,284   —   $ —   0.0 $ —  

The aggregate intrinsic value of options and SARs outstanding, as well as those which are vested and exercisable, is calculated as the difference between the exercise price of the underlying options and the fair value of the Company’s common stock as of
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the respective periods presented, accounting for the maximum appreciation of an award, as applicable. The aggregate intrinsic value of options exercised during the years ended December 31, 2025, 2024, and 2023 was $ 3.0 billion, $ 3.8 billion, and $ 0.5 billion, respectively, and is calculated based on the difference between the exercise price and the fair value of the Company’s common stock on the exercise date. There were no SARs exercised during the years ended December 31, 2025 and 2023. The aggregate intrinsic value of SARs exercised during the year ended December 31, 2024 was $ 0.7 billion.
There were no options granted during the years ended December 31, 2025, 2024, and 2023. The total grant-date fair value of options that vested during the years ended December 31, 2025, 2024, and 2023 was $ 103.6 million, $ 107.7 million, and $ 131.0 million, respectively . The weighted-average grant-date fair value of SARs granted during the year ended December 31, 2025 and 2024 was $ 22.43 and $ 4.08 per share, respectively. The total grant-date fair value of SARs that vested during the years ended December 31, 2025 and 2024 was $ 18.5 million and $ 138.8 million, respectively. There were no SARs granted or vested in the year ended December 31, 2023.
As of December 31, 2025, the total unrecognized stock-based compensation expense related to options and SARs outstanding was $ 406.0 million and $ 144.6 million, respectively, which is expected to be recognized over a weighted-average service period of five and eight years , respectively.
Time-Vesting SARs
The Company grants Time-Vesting SARs that vest over explicit service periods of up to nine years and are exercisable at expiration, during a limited window, if the Company’s stock price reaches a certain threshold. Time-Vesting SARs have exercise prices of between $ 39 –$ 250 and maximum appreciation values of between $ 60 –$ 300 .
The Company determined the grant-date fair value of Time-Vesting SARs using a Black-Scholes option-pricing model, calculated as the difference in fair value between a SAR with a strike price at the exercise price and a SAR with the strike price at its maximum appreciation, using the following assumptions:

Years Ended December 31,
2025 2024
Expected volatility rate 56.7 % – 66.1 %
54.9 % – 59.2 %

Expected term (in years) 3.4 – 9.3
3.7 – 9.2

Risk-free interest rate 3.9 % – 4.6 %
3.4 % – 3.9 %

Expected dividend yield — % — %

The expected volatility rate is based on a combination of the Company’s implied and historical volatility, and the historical volatility of comparable publicly-traded companies. The expected term represents the period of time the SARs are expected to be outstanding. The risk-free interest rate is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of the SAR. The Company has never paid and has no plans to pay dividends on its common stock, therefore the expected dividend yield is zero.
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Market-Vesting SARs
During the year ended December 31, 2024, the Company granted SARs that vested upon the satisfaction of a market-based vesting condition and were subject to continued service (“Market-Vesting SARs”). All Market-Vesting SARs were vested during the year ended December 31, 2024.
RSUs and P-RSUs
The following table summarizes the RSU and P-RSU activity for the year ended December 31, 2025 (in thousands, except per share amounts):

RSUs Outstanding Weighted Average Grant Date Fair Value per Share P-RSUs Outstanding Weighted Average Grant Date Fair Value per Share
Unvested and outstanding as of December 31, 2024 65,236   $ 14.89   577   $ 41.93  
Granted 5,751   136.28   815   106.56  
Vested ( 26,080 ) 19.31   ( 1,180 ) 70.04  
Canceled and forfeited ( 3,263 ) 29.34   ( 20 ) 103.49  
Adjustment for performance achievement (1)
( 74 ) $ 68.14  
Unvested and outstanding as of December 31, 2025 41,644   $ 27.74   118   $ 180.79  
—————
(1) This amount represents the difference between the maximum number of shares that could have been issued under the grant and the actual number of shares earned based on final performance.
The Company grants RSUs that have only a service-based vesting condition, as well as P-RSUs that have both service-based and performance-based vesting conditions. The service-based vesting condition for each is generally satisfied upon continued service through a specified date. Vesting periods for the RSUs and P-RSUs are generally up to four years and three months , respectively. The performance-based vesting condition is satisfied upon the achievement of certain Company performance goals set by the Compensation Committee of the Board of Directors. The ultimate number of P-RSUs earned and eligible to vest ranges between 0 % to 100 % of the target number of P-RSUs granted depending on the level of achievement of such Company performance goals.
The total grant-date fair value of RSUs vested during the years ended December 31, 2025, 2024, and 2023 was $ 503.7 million, $ 436.6 million, and $ 526.1 million, respectively. The total grant-date fair value of P-RSUs vested during the year ended December 31, 2025 and 2024 was $ 82.6 million and $ 75.0 million, respectively. There were no P-RSUs vested in the year ended December 31, 2023. As of December 31, 2025, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $ 914.9 million, which is expected to be recognized over a weighted-average service period of three years . As of December 31, 2025, there was no unrecognized stock-based compensation expense related to the P-RSUs outstanding.
Stock-based Compensation Expense
Total stock-based compensation expense was as follows (in thousands):

Years Ended December 31,
2025 2024 2023
Cost of revenue $ 64,555   $ 69,065   $ 35,995  
Sales and marketing 248,732   239,121   160,645  
Research and development 136,839   165,065   98,064  
General and administrative 233,907   218,387   181,199  
Total stock-based compensation expense $ 684,033   $ 691,638   $ 475,903  

The Company did not recognize any tax benefits related to stock-based compensation expense during the years ended December 31, 2025, 2024, or 2023.
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11. Taxes
The Company adopted ASU 2023-09, Income Taxes – Improvements to Income Tax Disclosures , for the annual disclosures for the year ended December 31, 2025 on a prospective basis. Comparative financial information for prior periods has not been restated and continues to be reported under the accounting standards in effect for those periods.
Income before provision for income taxes consisted of the following (in thousands):

Years Ended December 31,
2025 2024 2023
United States $ 1,584,577   $ 426,944   $ 174,637  
Foreign 72,791   62,229   62,454  
Income before provision for income taxes $ 1,657,368   $ 489,173   $ 237,091  

Provision for income taxes consisted of the following (in thousands):

Years Ended December 31,
2025 2024 2023
Current:
Federal $ —   $ —   $ —  
State 1,537   1,556   2,333  
Foreign 25,101   20,265   22,189  
Total current provision 26,638   21,821   24,522  
Deferred:
Federal —   —   —  
State —   —   —  
Foreign ( 3,914 ) ( 566 ) ( 4,806 )
Total deferred provision ( 3,914 ) ( 566 ) ( 4,806 )
Total provision for income taxes $ 22,724   $ 21,255   $ 19,716  

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A reconciliation of the expected tax provision at the statutory federal income tax rate to the Company’s recorded tax provision consisted of the following, subsequent to the adoption of ASU 2023-09 (in thousands, except percentages):

Year Ended
December 31, 2025
Amount Percent
U.S. federal tax at statutory rate $ 348,047   21.0   %
State and local income taxes, net of federal income tax effect (1)
1,537   0.1  
Foreign tax effects:
United Kingdom (“U.K.”):
Statutory tax rate difference between the U.K. and U.S. ( 29,130 ) ( 1.8 )
Stock-based compensation expense ( 159,108 ) ( 9.6 )
Changes in valuation allowance 184,024   11.1  
Other ( 3,279 ) ( 0.2 )
Other foreign jurisdictions 8,637   0.5  
Effects of changes in tax laws or rates enacted in the current period —   —  
Effects of cross-border tax laws —   —  
Tax credits ( 151,602 ) ( 9.1 )
Changes in valuation allowances 467,493   28.1  
Nontaxable or nondeductible items:
Stock-based compensation expense ( 720,691 ) ( 43.4 )
Nondeductible officers' compensation 34,453   2.1  
Other 4,442   0.3  
Changes in unrecognized tax benefits 37,901   2.3  

Total provision for income taxes and effective tax rate $ 22,724   1.4   %
————
(1) State taxes in Maryland made up the majority of the tax effect in this category.
A reconciliation of the expected tax provision at the statutory federal income tax rate to the Company’s recorded tax provision consisted of the following, prior to the adoption of ASU 2023-09 (in thousands):

Years Ended December 31,
2024 2023
Expected tax provision at U.S. federal statutory rate $ 102,726   $ 49,789  
State income taxes - net of federal benefit 1,365   2,309  
Foreign tax rate differential ( 15,767 ) 859  
Research and development tax credits ( 103,858 ) ( 45,667 )
Stock-based compensation ( 513,841 ) ( 79,128 )
Non-deductible officers’ compensation
33,404   34,479  
Change in valuation allowance 507,149   35,070  
Base Erosion Anti-Abuse Tax and related elections —   14,700  
Taxes withheld at source 5,599   4,378  
Non-deductible expenses 5,545   3,610  
Other ( 1,067 ) ( 683 )
Total provision for income taxes $ 21,255   $ 19,716  

For the year ended December 31, 2025, the Company recorded a provision for income taxes of $ 22.7 million compared to $ 21.3 million for the year ended December 31, 2024.
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For the year ended December 31, 2024, the Company recorded a provision for income taxes of $ 21.3 million compared to $ 19.7  million for the year ended December 31, 2023.
The amounts of cash taxes for the year ended December 31, 2025 included the following, subsequent to the adoption of ASU 2023-09 (in thousands):

Year Ended
December 31, 2025
Federal $ —  
State 2,500  
Foreign
Korea 5,771  
Japan 4,796  
France 2,843  
Germany 1,724  
All other foreign 4,052  
Income taxes, net of amounts refunded
$ 21,686  
Employment taxes $ 364,675  

Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis using enacted tax rates in effect for the year in which the differences are expected to reverse. Significant deferred tax assets and liabilities consisted of the following (in thousands):

As of December 31,
2025 2024
Net operating loss carryforwards $ 2,617,820   $ 1,583,076  
Capitalized research and experimental expenses 85,377   504,156  
Reserves and accruals 113,289   87,111  
Tax credit carryforwards 528,449   394,579  
Stock-based compensation 62,453   76,604  
Lease liabilities 54,842   60,103  
Depreciation and amortization 16,679   15,839  
Capitalized facilitative expenses 22,573   38,436  
Gross deferred tax assets 3,501,482   2,759,904  
Acquisition related intangibles ( 4,925 ) ( 6,827 )
Right-of-use assets ( 47,941 ) ( 50,208 )
Total net deferred tax assets before valuation allowance 3,448,616   2,702,869  
Valuation allowance ( 3,452,323 ) ( 2,710,393 )
Net deferred tax assets (liabilities) $ ( 3,707 ) $ ( 7,524 )