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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026
OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________
Commission File Number: 001-39540
________________________________________________

Palantir Technologies Inc.
(Exact Name of Registrant as Specified in its Charter)
________________________________________________
Delaware 68-0551851
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer
Identification No.)
19505 Biscayne Blvd., Suite 2350
Aventura , Florida
33180

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (720) 358-3679
________________________________________________
Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading
Symbol(s) Name of each exchange
on which registered
Class A Common Stock, par value $0.001 per share PLTR
The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒
Accelerated filer ☐

Non-accelerated filer ☐
Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of July 27, 2026, there were 2,300,713,329 shares of the registrant’s Class A common stock outstanding, 101,340,151 shares of the registrant’s Class B common stock outstanding, and 1,005,000 shares of the registrant’s Class F common stock outstanding.

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TABLE OF CONTENTS

Page
PART I. FINANCIAL INFORMATION

Item 1.
Financial Statements (Unaudited)
3

Condensed Consolidated Balance Sheets
3

Condensed Consolidated Statements of Operations
4

Condensed Consolidated Statements of Comprehensive Income
5

Condensed Consolidated Statements of Equity
6

Condensed Consolidated Statements of Cash Flows
8

Notes to Unaudited Condensed Consolidated Financial Statements
9

Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
22

Item 3.
Quantitative and Qualitative Disclosures About Market Risk
34

Item 4.
Controls and Procedures
34

PART II. OTHER INFORMATION

Item 1.
Legal Proceedings
36

Item 1A.
Risk Factors
36

Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
87

Item 3.
Defaults Upon Senior Securities
87

Item 4.
Mine Safety Disclosures
87

Item 5.
Other Information
87

Item 6.
Exhibits
88

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

Palantir Technologies Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share amounts)
(unaudited)

As of June 30,
2026 As of December 31,
2025
Assets
Current assets:
Cash and cash equivalents $ 2,030,047   $ 1,423,796  
Marketable securities 7,379,052   5,753,247  
Accounts receivable, net 1,485,249   1,042,065  
Prepaid expenses and other current assets 205,165   139,066  
Total current assets 11,099,513   8,358,174  
Property and equipment, net 61,403   51,960  
Operating lease right-of-use assets 230,268   200,105  
Other assets 287,380   290,153  
Total assets $ 11,678,564   $ 8,900,392  
Liabilities and Equity
Current liabilities:
Accounts payable, accrued liabilities, and other $ 504,070   $ 409,552  
Deferred revenue 579,437   408,963  
Customer deposits 452,075   357,066  
Total current liabilities 1,535,582   1,175,581  
Deferred revenue, noncurrent 33,722   46,216  
Customer deposits, noncurrent 537   18  
Operating lease liabilities, noncurrent 211,400   183,474  
Other noncurrent liabilities 12,439   7,092  
Total liabilities 1,793,680   1,412,381  
Commitments and Contingencies (Note 7)
Palantir's stockholders’ equity:
Common stock, $ 0.001 par value: 20,000,000 Class A shares authorized as of June 30, 2026 and December 31, 2025; 2,300,517 and 2,290,987 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively; 2,700,000 Class B shares authorized as of June 30, 2026 and December 31, 2025; 101,375 and 99,200 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively; and 1,005 Class F shares authorized, issued, and outstanding as of June 30, 2026 and December 31, 2025
2,403   2,391  
Additional paid-in capital 11,408,867   10,933,325  
Accumulated other comprehensive income (loss), net ( 7,103 ) 13,942  
Accumulated deficit ( 1,629,973 ) ( 3,562,390 )
Total Palantir's stockholders’ equity 9,774,194   7,387,268  
Noncontrolling interests 110,690   100,743  
Total equity 9,884,884   7,488,011  
Total liabilities and equity $ 11,678,564   $ 8,900,392  

The accompanying notes are an integral part of these condensed consolidated financial statements.
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Palantir Technologies Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)

Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Revenue $ 1,935,464   $ 1,003,697   $ 3,568,047   $ 1,887,552  
Cost of revenue 296,870   192,934   512,668   365,904  
Gross profit 1,638,594   810,763   3,055,379   1,521,648  
Operating expenses:
Sales and marketing 339,500   243,788   658,720   480,097  
Research and development 192,513   135,043   353,494   269,932  
General and administrative 194,577   162,615   377,163   326,254  
Total operating expenses 726,590   541,446   1,389,377   1,076,283  
Income from operations 912,004   269,317   1,666,002   445,365  
Interest income 77,505   56,255   143,899   106,696  
Other income (expense), net 91,836   6,596   160,045   3,423  
Income before provision for income taxes 1,081,345   332,168   1,969,946   555,484  
Provision for income taxes 15,383   3,596   27,582   9,195  
Net income 1,065,962   328,572   1,942,364   546,289  
Less: Net income attributable to noncontrolling interests 4,072   1,845   9,947   5,531  
Net income attributable to common stockholders $ 1,061,890   $ 326,727   $ 1,932,417   $ 540,758  
Earnings per share attributable to common stockholders, basic $ 0.44   $ 0.14   $ 0.81   $ 0.23  
Earnings per share attributable to common stockholders, diluted $ 0.41   $ 0.13   $ 0.75   $ 0.21  
Weighted-average shares of common stock outstanding used in computing earnings per share attributable to common stockholders, basic 2,399,820   2,365,196   2,396,861   2,356,983  
Weighted-average shares of common stock outstanding used in computing earnings per share attributable to common stockholders, diluted 2,568,694   2,562,912   2,569,826   2,557,911  

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

Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Net income $ 1,065,962   $ 328,572   $ 1,942,364   $ 546,289  
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments ( 895 ) 8,812   ( 4,222 ) 12,665  
Net unrealized loss on available-for-sale securities ( 6,809 ) ( 1,097 ) ( 16,823 ) ( 2,333 )
Comprehensive income 1,058,258   336,287   1,921,319   556,621  
Less: Comprehensive income attributable to noncontrolling interests 4,072   1,845   9,947   5,531  
Comprehensive income attributable to common stockholders $ 1,054,186   $ 334,442   $ 1,911,372   $ 551,090  

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

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

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 March 31, 2026 2,397,133   $ 2,397   $ 11,138,528   $ 601   $ ( 2,691,863 ) $ 8,449,663   $ 106,618   $ 8,556,281  
Issuance of common stock from the exercise of stock options 1,029   1   4,857   —  —  4,858   —  4,858  
Issuance of common stock upon release of restricted stock units (“RSUs”) and performance-based RSUs (“P-RSUs”) 4,735   5   ( 5 ) —  —  —  —  — 

Stock-based compensation —  —  265,487   —  —  265,487   —  265,487  
Other comprehensive loss —  —  —  ( 7,704 ) —  ( 7,704 ) —  ( 7,704 )
Net income —  —  —  —  1,061,890   1,061,890   4,072   1,065,962  
Balance as of June 30, 2026 2,402,897   $ 2,403   $ 11,408,867   $ ( 7,103 ) $ ( 1,629,973 ) $ 9,774,194   $ 110,690   $ 9,884,884  

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, 2025 2,391,192   $ 2,391   $ 10,933,325   $ 13,942   $ ( 3,562,390 ) $ 7,387,268   $ 100,743   $ 7,488,011  
Issuance of common stock from the exercise of stock options 2,067   2   9,755   —  —  9,757   —  9,757  
Issuance of common stock upon release of RSUs and P-RSUs 9,646   10   ( 10 ) —  —  —  —  — 
Repurchases of common stock ( 8 ) —   ( 1,500 ) —  —  ( 1,500 ) —  ( 1,500 )
Stock-based compensation —  —  467,297   —  —  467,297   —  467,297  
Other comprehensive loss —  —  —  ( 21,045 ) —  ( 21,045 ) —  ( 21,045 )
Net income —  —  —  —  1,932,417   1,932,417   9,947   1,942,364  
Balance as of June 30, 2026 2,402,897   $ 2,403   $ 11,408,867   $ ( 7,103 ) $ ( 1,629,973 ) $ 9,774,194   $ 110,690   $ 9,884,884  

The accompanying notes are an integral part of these condensed consolidated financial statements.
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Palantir Technologies Inc.
Condensed Consolidated Statements of Equity
(in thousands)
(unaudited)

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 March 31, 2025 2,359,663   $ 2,360   $ 10,398,181   $ ( 2,994 ) $ ( 4,973,392 ) $ 5,424,155   $ 94,818   $ 5,518,973  
Issuance of common stock from the exercise of stock options 5,528   5   28,612   —  —  28,617   —  28,617  
Issuance of common stock upon release of RSUs and P-RSUs 6,820   7   ( 7 ) —  —  —  —  — 
Repurchases of common stock ( 164 ) —   ( 18,596 ) —  —  ( 18,596 ) —  ( 18,596 )
Stock-based compensation —  —  160,283   —  —  160,283   —  160,283  
Other comprehensive income —  —  —  7,715   —  7,715   —   7,715  
Net income —  —  —  —  326,727   326,727   1,845   328,572  
Balance as of June 30, 2025 2,371,847   $ 2,372   $ 10,568,473   $ 4,721   $ ( 4,646,665 ) $ 5,928,901   $ 96,663   $ 6,025,564  

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 19,102   19   95,182   —  —  95,201   —  95,201  
Issuance of common stock upon release of RSUs and P-RSUs 14,325   14   ( 14 ) —  —  —  —  — 
Repurchases of common stock ( 375 ) —   ( 36,594 ) —  —  ( 36,594 ) —  ( 36,594 )
Stock-based compensation —  —  315,929   —  —  315,929   —  315,929  
Other comprehensive income —  —  —  10,332   —  10,332   —   10,332  
Net income —  —  —  —  540,758   540,758   5,531   546,289  
Balance as of June 30, 2025 2,371,847   $ 2,372   $ 10,568,473   $ 4,721   $ ( 4,646,665 ) $ 5,928,901   $ 96,663   $ 6,025,564  

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

Six Months Ended June 30,
2026 2025
Operating activities
Net income $ 1,942,364   $ 546,289  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 14,985   13,152  
Stock-based compensation 466,801   315,310  
Unrealized and realized (gain) loss from marketable securities, net ( 62,242 ) ( 452 )
Other operating activities ( 85,582 ) 2,092  
Changes in operating assets and liabilities:
Accounts receivable, net ( 433,801 ) ( 163,501 )
Prepaid expenses and other assets ( 53,906 ) ( 7,307 )
Accounts payable and accrued liabilities 88,097   48,202  
Contract liabilities 256,528   120,666  
Other liabilities ( 17,912 ) ( 24,937 )
Net cash provided by operating activities 2,115,332   849,514  
Investing activities
Purchases of property and equipment ( 21,955 ) ( 13,818 )
Purchases of marketable securities ( 3,505,299 ) ( 2,576,231 )
Proceeds from sales and redemption of marketable securities 2,017,589   652,762  
Other investing activities —   ( 70,000 )
Net cash used in investing activities ( 1,509,665 ) ( 2,007,287 )
Financing activities
Proceeds from the exercise of common stock options 9,757   95,201  
Other financing activities ( 1,379 ) ( 117,648 )
Net cash provided by (used in) financing activities 8,378   ( 22,447 )
Effect of foreign exchange on cash, cash equivalents, and restricted cash ( 2,112 ) 11,518  
Net increase (decrease) in cash, cash equivalents, and restricted cash 611,933   ( 1,168,702 )
Cash, cash equivalents, and restricted cash - beginning of period 1,451,425   2,119,936  
Cash, cash equivalents, and restricted cash - end of period $ 2,063,358   $ 951,234  

The accompanying notes are an integral part of these condensed consolidated financial statements.
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Palantir Technologies Inc.
Notes to Unaudited Condensed 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 unaudited condensed 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 (“SEC”) regarding interim financial reporting. The accompanying condensed 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.
The unaudited condensed consolidated balance sheet as of December 31, 2025 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including certain notes required by GAAP on an annual reporting basis. In management’s opinion, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the balance sheets and statements of operations, comprehensive income, stockholders’ equity, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year or any future period.
These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes included in its Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 17, 2026.
Use of Estimates
The preparation of the condensed 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 condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods.
Significant estimates and assumptions made in the accompanying condensed 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, and the valuation and recognition of stock-based compensation awards. 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.
Summary of Significant Accounting Policies
The Company’s significant accounting policies are discussed in Note 2. Significant Accounting Policies in the notes to consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 17, 2026. There have been no significant changes to these policies during the six months ended June 30, 2026, except for the changes noted below.
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 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.
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Palantir Technologies Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

The Company is exposed to concentrations of credit risk with respect to accounts receivable presented on the condensed consolidated balance sheets. The Company’s accounts receivable balances as of June 30, 2026 and December 31, 2025 were $ 1.5 billion and $ 1.0 billion, respectively. Customer I represented 27 % and 25 % of total accounts receivable as of June 30, 2026 and December 31, 2025, respectively. No other customer represented more than 10% of total accounts receivable as of June 30, 2026 or December 31, 2025.
For the three and six months ended June 30, 2026 and 2025, no customer represented more than 10% of total revenue.
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 stock appreciation rights (“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, 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. For SARs that are fully vested and exercisable upon grant with an exercise price equal to the fair market value of the Company’s common stock on the grant date, the Company estimates the grant-date fair value using a Monte Carlo simulation model, which requires the use of various assumptions including the contractual term, expected volatility rate, risk-free interest rate, annual post-vest termination rate, and expected exercise factor as of the grant date.
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.
Recent Accounting Pronouncements Not Yet Adopted
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 Accounting Standards Codification (“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
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Palantir Technologies Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

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 June 30, 2026 and December 31, 2025, the Company's contract liabilities were $ 1.1 billion and $ 0.8 billion, respectively. Revenue of $ 604 million and $ 404 million was recognized during the six months ended June 30, 2026 and 2025, respectively, that was included in contract liabilities as of December 31, 2025 and 2024, 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 $ 4.9  billion as of June 30, 2026, of which the Company expects to recognize approximately 43 % as revenue over the next 12 months, 36 % as revenue over the subsequent 13 to 36 months, and the remainder thereafter.

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 June 30, 2026
Total Level 1 Level 2 Level 3
Assets:
Cash and cash equivalents:
Money market funds $ 1,040,164   $ 1,040,164   $ —   $ —  
U.S. Treasury securities 396,828   —   396,828   —  
Prepaid expenses and other current assets and other assets:
Certificates of deposit 4,871   —   4,871   —  
Marketable securities:
U.S. Treasury securities 7,194,962   —   7,194,962   —  
Publicly-traded equity securities 184,090   184,090   —   —  
Total $ 8,820,915   $ 1,224,254   $ 7,596,661   $ —  

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Palantir Technologies Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

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   $ —  

Debt Securities
As of June 30, 2026, available-for-sale debt securities consisted of the following (in thousands):

As of June 30, 2026
Amortized Cost Unrealized Gains Unrealized Losses Fair Value
U.S. Treasury securities $ 7,599,616   $ 658   $ ( 8,484 ) $ 7,591,790  
Total debt securities $ 7,599,616   $ 658   $ ( 8,484 ) $ 7,591,790  
Included in cash and cash equivalents $ 396,854   $ —   $ ( 26 ) $ 396,828  
Included in marketable securities $ 7,202,762   $ 658   $ ( 8,458 ) $ 7,194,962  

As of December 31, 2025, available-for-sale debt securities, all of which are included in marketable securities on the condensed 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  

No available-for-sale debt securities were sold during the three and six months ended June 30, 2026 or the three months ended June 30, 2025. The Company sold $ 280 million of available-for-sale debt securities during the six months ended June 30, 2025. The realized gains and losses from those sales were immaterial. As of June 30, 2026 and December 31, 2025, available-for-sale debt securities of $ 5.8 billion and $ 0.7 billion, 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 June 30, 2026 or December 31, 2025 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. The Company did not recognize any credit losses related to available-for-sale debt securities during the three and six months ended June 30, 2026 and 2025. All of the Company’s U.S. Treasury securities had contractual maturities due within one year as of June 30, 2026 and December 31, 2025.
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 condensed consolidated balance sheets. Realized and unrealized gains and losses are recorded in other income (expense), net on the condensed consolidated statements of operations. For the three and six months ended June 30, 2026 net unrealized gains from publicly-traded equity securities held at the end of the period, the majority of which are subject to short-term restrictions on the ability to sell, were $ 66 million and $ 64 million, respectively. The net unrealized losses from publicly-traded equity securities at the end of the period were immaterial for the three and six months ended June 30, 2025.
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Palantir Technologies Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

The Company also holds equity securities in privately-held companies without readily determinable fair values that are recorded using the measurement alternative. As of June 30, 2026 and December 31, 2025, the total amount of privately-held equity securities included in other assets on the condensed consolidated balance sheets was $ 167 million and $ 170 million, respectively. The Company classifies these fair value measurements as Level 3 within the fair value hierarchy. There were no material upward or downward adjustments or impairments for the privately-held equity securities during the three and six months ended June 30, 2026 or 2025. Cumulative upward and downward adjustments and impairments on privately-held equity securities held by the Company as of June 30, 2026 were not material.

5. Supplemental Financial Statement Information
Cash, Cash Equivalents, and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the amounts shown in the condensed consolidated statements of cash flows (in thousands):

As of June 30,
2026 2025
Cash and cash equivalents $ 2,030,047   $ 929,547  
Restricted cash included in prepaid expenses and other current assets 9,739   9,015  
Restricted cash included in other assets 23,572   12,672  
Total cash, cash equivalents, and restricted cash $ 2,063,358   $ 951,234  

Accounts Payable, Accrued Liabilities, and Other
Accounts payable, accrued liabilities, and other consisted of the following (in thousands):

As of June 30,
2026 As of December 31,
2025
Accounts payable $ 3,102   $ 8,064  
Accrued payroll and related expenses 144,079   178,659  

Accrued taxes 104,785   56,579  
Other current liabilities 252,104   166,250  
Total accounts payable, accrued liabilities, and other $ 504,070   $ 409,552  

6. Debt
2014 Credit Facility
The Company has a secured revolving credit facility which provides for aggregate revolving commitments of $ 500 million and has a maturity date of March 31, 2027 (as amended, the “2014 Credit Facility”). As of June 30, 2026, 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 million, and certain limitations on liens and indebtedness. The Company was in compliance with all covenants associated with the 2014 Credit Facility as of June 30, 2026.

7. Commitments and Contingencies
Purchase Commitments
The Company has purchase commitments with various third parties primarily for cloud hosting services. In March 2026, the Company amended one of its third-party cloud services agreements. Under the amended agreement, the Company has committed to spend at least $ 5.6 billion, with annual minimum commitments of $ 268 million to $ 979 million, over ten contract years through February 29, 2036, among other things. Any and all previous payment obligations related to such third-party cloud hosting services agreement were terminated concurrently with the signing of this amendment.
As of June 30, 2026, except for the aforementioned, there were no material changes outside the ordinary course of business to the Company’s commitments, as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2025.
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Palantir Technologies Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

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 S hijun 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. On March 16, 2026, the United States Court of Appeals for the Tenth Circuit held oral arguments for the case.

As of June 30, 2026, 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 condensed 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 operations and maintenance (“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 June 30, 2026 and December 31, 2025.
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 June 30, 2026 and December 31, 2025.
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.
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Palantir Technologies Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

8. 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  million of the Company's equity securities as of June 30, 2026.
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 June 30, 2026.
The following represented the total authorized, issued, and outstanding shares for each class of common stock (in thousands):

As of June 30, 2026 As of December 31, 2025
Authorized Issued and Outstanding Authorized Issued and Outstanding
Class A Common Stock 20,000,000   2,300,517   20,000,000   2,290,987  
Class B Common Stock 2,700,000   101,375   2,700,000   99,200  
Class F Common Stock 1,005   1,005   1,005   1,005  
Total 22,701,005   2,402,897   22,701,005   2,391,192  

9. Stock-Based Compensation
Stock Options and SARs
The following table summarizes stock option and SAR activity for the six months ended June 30, 2026 (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, 2025 152,202   $ 9.98   6.1 $ 25,536   11,271   $ 130.00   7.1 $ 794  
Granted —   —   2,889   143.59  
Exercised ( 2,067 ) 4.72   —   —  
Canceled and forfeited ( 458 ) 6.22   ( 489 ) 165.15  
Balance as of June 30, 2026 149,677   $ 10.06   5.7 $ 15,957   13,671   $ 131.61   11.1 $ 377  
Vested and exercisable as of June 30, 2026 79,177   $ 8.89   5.3 $ 8,534   1,772   $ 113.27   40.0 $ 6  

As of June 30, 2026, the total unrecognized stock-based compensation expense related to options and SARs outstanding was $ 361 million, and $ 136 million, respectively, which is expected to be recognized over a weighted-average service period of five and eight years , respectively. The weighted-average grant date fair value of SARs granted during the six months ended June 30, 2026 was $ 38.00 per share.
The Company grants SARs that vest over explicit service periods of up to approximately ten years and are exercisable at expiration, during a limited window, if the Company’s stock price reaches a certain threshold. These awards have exercise prices of between $ 39 –$ 250 and maximum appreciation values of between $ 60 –$ 300 .
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Palantir Technologies Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

The Company determined the grant date fair value of these awards 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:

Six Months Ended June 30,
2026 2025
Expected volatility rate 56.7 % - 57.0 %
61.0 % - 66.1 %

Expected term (in years) 8.7 - 9.7
3.4 - 8.9

Risk-free interest rate 3.9 % - 4.2 %
4.3 % - 4.6 %

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.
The Company also grants SARs that are fully vested and exercisable upon grant, with an exercise price equal to the fair market value of the Company’s common stock on the grant date and contractual periods of up to 40 years. The Company determined the grant-date fair value of these awards using a Monte Carlo simulation model using the following assumptions:

Six Months Ended June 30,
2026
Expected volatility rate 60.0 %
Expected exercise factor 2.6 x
Risk-free interest rate 4.9 %
Expected dividend yield — %

The expected volatility rate is based on the Company’s implied volatility. The expected exercise factor represents the multiple of the strike price at which the SARs are expected to be exercised. The risk-free interest rate is based on the long-term U.S. Treasury zero coupon issues in effect at the time of grant. The Company has never paid and has no plans to pay dividends on its common stock, therefore the expected dividend yield is zero.
RSUs and P-RSUs
The following table summarizes the RSU and P-RSU activity for the six months ended June 30, 2026 (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, 2025 41,644   $ 27.74   118   $ 180.79  
Granted 2,653   138.14   233   158.25  
Vested ( 9,745 ) 31.83   ( 218 ) 179.69  
Canceled and forfeited ( 1,303 ) 67.71   ( 12 ) 158.22  
Adjustment for performance achievement (1)
—   —  
Unvested and outstanding as of June 30, 2026 33,249   $ 33.79   121   $ 141.57  

—————
(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.
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Palantir Technologies Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

As of June 30, 2026, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $ 916 million, which the Company expects to recognize over a weighted-average service period of three years . As of June 30, 2026, 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):

Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Cost of revenue $ 30,889   $ 14,973   $ 48,795   $ 29,989  
Sales and marketing 106,067   56,040   182,963   108,553  
Research and development 58,193   32,068   94,738   63,902  
General and administrative 70,060   56,890   140,305   112,866  
Total stock-based compensation expense $ 265,209   $ 159,971   $ 466,801   $ 315,310  

10. Income Taxes
The Company is subject to income tax in the U.S. as well as other tax jurisdictions in which it conducts business. The Company’s effective tax rate as of June 30, 2026 differs from the U.S. statutory rate primarily due to foreign income taxed at different rates, non-deductible stock-based compensation, other non-deductible expenses, and valuation allowances recorded on its deferred tax assets from the U.S., United Kingdom (“U.K.”), and other jurisdictions . The provision for income taxes increased by $ 12 million and $ 18 million, respectively, for each of the three and six months ended June 30, 2026 compared to the same periods in 2025. The increases were primarily related to higher U.S. and foreign profits.
The realization of deferred tax assets is dependent upon the generation of sufficient taxable income of the appropriate character in future periods. The Company assesses its ability to realize the deferred tax assets on a quarterly basis, and it establishes a valuation allowance if it is more likely than not that some portion of the deferred tax assets will not be realized. The Company weighs all available positive and negative evidence, including its earnings history and results of recent operations, scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies. For example, due to the weight of objectively verifiable negative evidence, including its history of U.S. and U.K. net operating tax losses, the Company has maintained a full valuation allowance on its U.S. and U.K. deferred tax assets as of June 30, 2026. However, given the Company’s recent earnings and anticipated future earnings, there is a reasonable possibility that it will have sufficient positive evidence in the future to release all or a portion of the valuation allowance it recorded against its deferred tax assets.
The Organisation for Economic Co-operation and Development (“OECD”) Base Erosion and Profit Shifting (“BEPS”) global minimum tax provision (“Pillar Two”) rules are at varying stages of adoption across jurisdictions where the Company operates. Several countries have enacted Pillar Two and in certain jurisdictions these rules were applicable to the Company starting January 1, 2024. These did not have a material impact on our financial condition or results of operations for the periods presented. Furthermore, the OECD released administrative guidance on January 5, 2026, including a “Side-by-Side Safe Harbor”, which reduces the impact of Pillar Two rules on the Company.
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Palantir Technologies Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

11. Earnings Per Share Attributable to Common Stockholders
The following table presents the calculation of basic and diluted earnings per share attributable to common stockholders (in thousands, except per share amounts):

Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Numerator

Net income attributable to common stockholders for diluted earnings per share $ 1,061,890   $ 326,727   $ 1,932,417   $ 540,758  
Denominator
Weighted-average shares used in computing earnings per share:
Basic 2,399,820   2,365,196   2,396,861   2,356,983  
Effect of dilutive shares 168,874   197,716   172,965   200,928  
Diluted 2,568,694   2,562,912   2,569,826   2,557,911  
Earnings per share
Earnings per share attributable to common stockholders:
Basic $ 0.44   $ 0.14   $ 0.81   $ 0.23  
Diluted $ 0.41   $ 0.13   $ 0.75   $ 0.21  

Diluted earnings per share is calculated using our weighted-average shares of outstanding common stock including the dilutive effect of stock awards as determined under the treasury stock method. There were outstanding potentially dilutive common stock equivalents for stock-based compensation awards of 3 million for the three and six months ended June 30, 2026 and 1 million for the three and six months ended June 30, 2025. These were excluded from the computation of diluted earnings per share attributable to common stockholders due to their antidilutive effect.
As of June 30, 2026 and 2025, the Company had 14 million and 7 million SARs outstanding, respectively, of which the maximum number of potentially dilutive shares of Class A common stock upon vesting would be the fraction that equals the appreciation, or maximum appreciation if capped, divided by the Company’s Class A common stock price at that time.

12. Segment and Geographic Information
The following reporting segment tables reflect the results of the Company’s reportable operating segments consistent with the manner in which the chief operating decision maker (“CODM”) evaluates the performance of each segment and allocates the Company’s resources. The CODM does not evaluate the performance of the Company’s assets on a segment basis for internal management reporting and, therefore, such information is not presented.
Contribution is used, in part, to evaluate the performance of, and allocate resources to, each of the segments, primarily by monitoring actual results versus historical periods. A segment’s contribution is calculated as segment revenue less the related costs of revenue and sales and marketing expenses. It excludes certain operating expenses that are not allocated to segments because they are separately managed at the consolidated corporate level or are noncash costs. These unallocated and noncash costs include stock-based compensation expense, research and development expenses, and general and administrative expenses.
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Palantir Technologies Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

Financial information for each reportable segment, including disaggregation of revenue, was as follows (in thousands, except percentages):

Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Amount % Amount % Amount % Amount %
Contribution:
Government revenue $ 990,032   $ 552,983   $ 1,848,442   $ 1,039,946  
Expenses attributable to government segment ( 288,926 ) ( 202,571 ) ( 517,925 ) ( 388,574 )
Government contribution 701,106   71   % 350,412   63   % 1,330,517   72   % 651,372   63   %
Commercial revenue 945,432   450,714   1,719,605   847,606  
Expenses attributable to commercial segment ( 210,488 ) ( 163,138 ) ( 421,705 ) ( 318,885 )
Commercial contribution 734,944   78   % 287,576   64   % 1,297,900   75   % 528,721   62   %
Total contribution $ 1,436,050   74   % $ 637,988   64   % $ 2,628,417   74   % $ 1,180,093   63   %

The reconciliation of total contribution to income from operations is as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Income from operations $ 912,004   $ 269,317   $ 1,666,002   $ 445,365  

Research and development expenses (1)
134,320   102,975   258,756   206,030  
General and administrative expenses (1)
124,517   105,725   236,858   213,388  
Total stock-based compensation expense 265,209   159,971   466,801   315,310  
Total contribution $ 1,436,050   $ 637,988   $ 2,628,417   $ 1,180,093  

—————
(1) Excludes stock-based compensation expense.
Geographic Information
Revenue by geography is based on the customer’s headquarters or agency location at the time of sale. Revenue is as follows (in thousands, except percentages):

Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Amount % Amount % Amount % Amount %
Revenue:
United States $ 1,573,047   81   % $ 732,592   73   % $ 2,855,113   80   % $ 1,361,086   72   %

Rest of world (1)
362,417   19   % 271,105   27   % 712,934   20   % 526,466   28   %
Total revenue $ 1,935,464   100   % $ 1,003,697   100   % $ 3,568,047   100   % $ 1,887,552   100   %

—————
(1) No other country represented 10 % or more of total revenue for the three and six months ended June 30, 2026 or 2025.

13. Related Party Transactions
Alexander Karp, the Company’s Chief Executive Officer, flies on a non-commercial aircraft beneficially owned by him (the “Executive Aircraft”) for business and personal travel. During the six months ended June 30, 2026 and 2025, the Company incurred expenses related to the use of the Executive Aircraft of $ 6 million and $ 10 million, respectively.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “can,” “would,” “intend,” “target,” “goal,” “outlook,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “future,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
• our expectations regarding financial performance and liquidity, including but not limited to our expectations regarding revenue, cost of revenue, operating expenses, stock-based compensation, our ability to maintain future profitability, and cash flows;
• our ability to successfully execute our business and growth strategy;
• the sufficiency of our available funds to meet our liquidity needs;
• the demand for our platforms in general;
• our ability to increase our number of customers and revenue generated from customers;
• our expectations regarding the future contribution margin of our existing and future customers;
• our expectations regarding our ability to quickly and effectively integrate our platforms for our existing and future customers;
• our ability to develop new platforms, and enhancements to existing platforms, and bring them to market in a timely manner;
• our market share, category positions, and market trends, including our ability to grow our business in large government and commercial organizations, including our expectations regarding the impact of Federal Acquisition Streamlining Act of 1994 (“FASA”);
• our ability to compete with existing and new competitors in existing and new markets and products;
• our expectations regarding anticipated technology needs and developments and our ability to address those needs and developments with our platforms;
• our expectations regarding litigation and legal and regulatory matters;
• our expectations regarding our ability to meet existing performance obligations and maintain the operability of our products;
• our expectations regarding the effects of existing and developing laws and regulations, including with respect to taxation, privacy, data protection, cybersecurity, and artificial intelligence (“AI”);
• our expectations regarding new and evolving markets, such as AI;
• our ability to develop and protect our brand;
• our ability to maintain the security and availability of our platforms, including preventing and mitigating any product bugs or defects, as well as any cybersecurity or similar incidents;
• our expectations and management of future growth;
• our expectations concerning relationships with third parties, including our customers, equity method investment partners, and vendors;
• our expectations regarding our investments in, and enterprise agreements with, various publicly-traded and privately-held entities, including special purpose acquisition companies;
• our ability to maintain, protect, and enhance our intellectual property;
• our expectations regarding our multi-class stock and governance structure and the benefits thereof;
• our expectations regarding macroeconomic conditions, including global political and economic uncertainty, fluctuating interest rates, monetary policy changes, or the potential or actual imposition of tariffs or other impacts on trade relations;
• the impacts of catastrophic events, including natural disasters, global pandemics, geopolitical tensions, war, terrorism, or other events beyond our control, on our and our customers’, vendors’, and partners’ respective businesses and the markets in which we and our customers, vendors, and partners operate;
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• the impacts of the volatility and fluctuations in currency exchange rates, including an increase in the strength of the United States (“U.S.”) dollar, on the costs of our products outside of the United States and on customer demand; and
• the significant expenses associated with being a public company.
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in the section titled “ Risk Factors ” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on any forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in such forward-looking statements.
Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, restructurings, joint ventures, partnerships, channel sales relationships, or investments we may make.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
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ITEM 2. 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 condensed consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q. 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 Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Overview
We build software that empowers organizations to effectively integrate their data, decisions, and operations at scale.
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 our Artificial Intelligence Platform (“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 large language models (“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.
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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 three months ended June 30, 2026, we generated $1.9 billion in revenue, reflecting a 93% growth rate from the three months ended June 30, 2025 when we generated $1.0 billion in revenue. For the six months ended June 30, 2026, we generated $3.6 billion in revenue, reflecting a 89% growth rate from the six months ended June 30, 2025 when we generated $1.9 billion in revenue.
In the three months ended June 30, 2026 and 2025, we generated income from operations of $912 million and $269 million, respectively, or adjusted income from operations of $1.2 billion and $0.5 billion, respectively, when excluding stock-based compensation and related employer payroll taxes. In the six months ended June 30, 2026 and 2025, we generated income from operations of $1.7 billion and $0.4 billion, respectively, or adjusted income from operations of $2.2 billion and $0.9 billion, respectively, when excluding stock-based compensation and related employer payroll taxes.
In the three months ended June 30, 2026 and 2025, our gross profit was $1.6 billion and $0.8 billion, respectively, reflecting a gross margin of 85% and 81%, respectively, or 86% and 82%, respectively, when excluding stock-based compensation. In the six months ended June 30, 2026 and 2025, our gross profit was $3.1 billion and $1.5 billion, respectively, reflecting a gross margin of 86% and 81%, respectively, or 87% and 82%, respectively, when excluding stock-based compensation.
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 June 30, 2026 and 2025, we had 1,049 and 849 customers, respectively, including companies in various commercial sectors and government agencies around the world.
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. Our average revenue for the top twenty customers during the trailing twelve months ended June 30, 2026 was $124 million, which grew 67% from an average of $75 million in revenue from the top twenty customers during the trailing twelve months ended June 30, 2025, 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 six months ended June 30, 2026, 52% of our revenue came from government customers and 48% came from commercial customers.
Our U.S. customers have been a meaningful source of revenue growth for our business and, in recent periods, has represented an increasing portion of our total revenue. In the six months ended June 30, 2026, we generated 80% of our revenue from customers in the United States and the remaining 20% from non-U.S. customers. Revenue from our U.S. customers during the trailing twelve months ended June 30, 2026 was $4.8 billion, which grew 99% 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
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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 Quarterly Report on Form 10-Q.
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.

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, supply chain disruptions, geopolitical or economic uncertainty, 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. In particular, if the portion of total revenue attributable to the United States remains at current levels or continues to increase, our business and financial condition could be more exposed to any future adverse conditions such as these in the United States. 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 Quarterly Report on Form 10-Q 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 conflicts, including the escalation of hostilities resulting from the recent strikes by the United States and Israel on Iran and retaliatory strikes related thereto, 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, Israel, and broader Middle East regions 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.
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 (“EUR”) and British pound sterling (“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 Japanese Yen (“JPY”), EUR, 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 six months ended June 30, 2026 such impacts were not material to our financial position or results of operations.
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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 condensed 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 U.S. generally accepted accounting principles (“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.

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 condensed 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.
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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 three and six months ended June 30, 2026 and 2025 (in thousands, except percentages):

Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Income from operations $ 912,004  $ 269,317  $ 1,666,002  $ 445,365 
Add:
Research and development expenses (1)
134,320  102,975  258,756  206,030 
General and administrative expenses (1)
124,517  105,725  236,858  213,388 
Total stock-based compensation expense 265,209  159,971  466,801  315,310 
Total contribution $ 1,436,050  $ 637,988  $ 2,628,417  $ 1,180,093 
Contribution margin 74  % 64  % 74  % 63  %

————
(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 three and six months ended June 30, 2026 and 2025 (in thousands, except percentages):

Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Gross profit $ 1,638,594  $ 810,763  $ 3,055,379  $ 1,521,648 
Add: stock-based compensation 30,889  14,973  48,795  29,989 
Gross profit, excluding stock-based compensation $ 1,669,483  $ 825,736  $ 3,104,174  $ 1,551,637 
Gross margin, excluding stock-based compensation 86  % 82  % 87  % 82  %

Adjusted Income from Operations and Adjusted Operating Margin
The following table provides a reconciliation of adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes for the three and six months ended June 30, 2026 and 2025 (in thousands, except percentages):

Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Income from operations $ 912,004  $ 269,317  $ 1,666,002  $ 445,365 
Add: stock-based compensation 265,209  159,971  466,801  315,310 
Add: employer payroll taxes related to stock-based compensation 17,259  35,097  45,214  94,420 
Adjusted income from operations $ 1,194,472  $ 464,385  $ 2,178,017  $ 855,095 
Adjusted operating margin 62  % 46  % 61  % 45  %

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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 operating and maintenance (“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 functions, executing on pilots, and customer growth activities; as well as third-party cloud hosting services for our pilots, travel costs, 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 and may vary from period to period 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.
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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 gains and 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 or are noncash costs. These noncash or unallocated costs include stock-based compensation expense, research and development costs, and general and administrative costs.
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Results of Operations
The following table summarizes our condensed consolidated statements of operations data (in thousands):

Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Revenue $ 1,935,464  $ 1,003,697  $ 3,568,047  $ 1,887,552 
Cost of revenue 296,870  192,934  512,668  365,904 
Gross profit 1,638,594  810,763  3,055,379  1,521,648 
Operating expenses:
Sales and marketing 339,500  243,788  658,720  480,097 
Research and development 192,513  135,043  353,494  269,932 
General and administrative 194,577  162,615  377,163  326,254 
Total operating expenses 726,590  541,446  1,389,377  1,076,283 
Income from operations 912,004  269,317  1,666,002  445,365 
Interest income 77,505  56,255  143,899  106,696 
Other income (expense), net 91,836  6,596  160,045  3,423 
Income before provision for income taxes 1,081,345  332,168  1,969,946  555,484 
Provision for income taxes 15,383  3,596  27,582  9,195 
Net income 1,065,962  328,572  1,942,364  546,289 
Less: Net income attributable to noncontrolling interests 4,072  1,845  9,947  5,531 
Net income attributable to common stockholders $ 1,061,890  $ 326,727  $ 1,932,417  $ 540,758 

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

Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Revenue 100  % 100  % 100  % 100  %
Cost of revenue 15  19  14  19 
Gross margin 85  81  86  81 
Operating expenses:
Sales and marketing 18  24  18  26 
Research and development 10  14  10  14 
General and administrative 10  16  11  17 
Total operating expenses 38  54  39  57 
Income from operations 47  27  47  24 
Interest income 4  5  4  5 
Other income (expense), net 5  1  4  — 
Income before provision for income taxes 56  33  55  29 
Provision for income taxes 1  —  1  — 
Net income 55  33  54  29 
Less: Net income attributable to noncontrolling interests —  —  —  — 
Net income attributable to common stockholders 55  % 33  % 54  % 29  %

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Comparison of the Three and Six Months Ended June 30, 2026 and 2025
Revenue

Three Months Ended
June 30, Change Six Months Ended
June 30, Change
2026 2025 Amount % 2026 2025 Amount %
Revenue:
Government $ 990,032  $ 552,983  $ 437,049  79  % $ 1,848,442  $ 1,039,946  $ 808,496  78  %
Commercial 945,432  450,714  494,718  110  % 1,719,605  847,606  871,999  103  %
Total revenue $ 1,935,464  $ 1,003,697  $ 931,767  93  % $ 3,568,047  $ 1,887,552  $ 1,680,495  89  %

Revenue increased by $932 million, or 93%, for the three months ended June 30, 2026 compared to the same period in 2025. Revenue from government customers increased by $437 million, or 79%, for the three months ended June 30, 2026 compared to the same period in 2025. Of the increase, $428 million was from government customers existing as of December 31, 2025. Revenue from U.S. government customers was $809 million for the three months ended June 30, 2026 compared to $426 million for the same period in 2025. Revenue from commercial customers increased by $495 million, or 110%, for the three months ended June 30, 2026 compared to the same period in 2025. Of the increase, $407 million was from commercial customers existing as of December 31, 2025. Revenue from U.S. commercial customers was $764 million for the three months ended June 30, 2026 compared to $306 million for the same period in 2025, a 149% increase.
Revenue increased by $1.7 billion, or 89%, for the six months ended June 30, 2026 compared to the same period in 2025. Revenue from government customers increased by $808 million, or 78%, for the six months ended June 30, 2026 compared to the same period in 2025. Of the increase, $795 million was from government customers existing as of December 31, 2025. Revenue from U.S. government customers was $1.5 billion for the six months ended June 30, 2026 compared to $0.8 billion for the same period in 2025. Revenue from commercial customers increased by $872 million, or 103%, for the six months ended June 30, 2026 compared to the same period in 2025. Revenue from U.S. commercial customers was $1.4 billion for the six months ended June 30, 2026 compared to $0.6 billion for the same period in 2025, a 142% increase.
Generally, increases in revenue from our existing customers are related to increased adoption of our products and services within their organizations.
Cost of Revenue and Gross Profit

Three Months Ended
June 30, Change Six Months Ended
June 30, Change
2026 2025 Amount % 2026 2025 Amount %
Cost of revenue $ 296,870  $ 192,934  $ 103,936  54  % $ 512,668  $ 365,904  $ 146,764  40  %
Gross profit $ 1,638,594  $ 810,763  $ 827,831  102  % $ 3,055,379  $ 1,521,648  $ 1,533,731  101  %
Gross margin 85  % 81  % 4  % 86  % 81  % 5  %

Cost of revenue for the three months ended June 30, 2026 increased by $104 million, or 54%, compared to the same period in 2025. The increase was primarily due to increases of $89 million in third-party cloud hosting services and $13 million in stock-based compensation and related expenses, partially offset by a decrease of $13 million in subcontractor expenses.
Our gross margin for the three months ended June 30, 2026 and 2025 was 85% and 81%, respectively.
Cost of revenue for the six months ended June 30, 2026 increased by $147 million, or 40%, compared to the same period in 2025. The increase was primarily due to increases of $128 million in third-party cloud hosting services and $16 million in payroll and other payroll-related costs, partially offset by a decrease of $19 million in subcontractor expenses.
Our gross margin for the six months ended June 30, 2026 and 2025 was 86% and 81%, respectively.
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Operating Expenses

Three Months Ended
June 30, Change Six Months Ended
June 30, Change
2026 2025 Amount % 2026 2025 Amount %
Sales and marketing $ 339,500  $ 243,788  $ 95,712  39  % $ 658,720  $ 480,097  $ 178,623  37  %
Research and development 192,513  135,043  57,470  43  % 353,494  269,932  83,562  31  %
General and administrative 194,577  162,615  31,962  20  % 377,163  326,254  50,909  16  %
Total operating expenses $ 726,590  $ 541,446  $ 185,144  34  % $ 1,389,377  $ 1,076,283  $ 313,094  29  %

Sales and Marketing
Sales and marketing expenses increased by $96 million, or 39%, for the three months ended June 30, 2026 compared to the same period in 2025. The increase was primarily due to increases of $43 million in stock-based compensation and related expenses and $22 million in payroll and other payroll-related costs.
Sales and marketing expenses increased by $179 million, or 37%, for the six months ended June 30, 2026 compared to the same period in 2025. The increase was primarily due to increases of $58 million in stock-based compensation and related expenses, $43 million in payroll and other payroll-related costs, and $36 million in marketing expenses,
Research and Development
Research and development expenses increased by $57 million, or 43%, for the three months ended June 30, 2026 compared to the same period in 2025. The increase was primarily due to increases of $25 million third-party cloud hosting services and $20 million in stock-based compensation and related expenses.
Research and development expenses increased by $84 million, or 31%, for the six months ended June 30, 2026 compared to the same period in 2025. The increase was primarily due to increases of $50 million in third-party cloud hosting services and $18 million in stock-based compensation and related expenses.
General and Administrative
General and administrative expenses increased by $32 million, or 20%, for the three months ended June 30, 2026 compared to the same period in 2025. The increase was primarily due to an $11 million in stock-based compensation and related expenses and $8 million in payroll and other payroll-related costs.
General and administrative expenses increased by $51 million, or 16%, for the six months ended June 30, 2026 compared to the same period in 2025. The increase was primarily due to an increase of $17 million in stock-based compensation and related expenses and $12 million in payroll and other payroll-related costs.
Stock-Based Compensation

Three Months Ended
June 30, Change Six Months Ended
June 30, Change
2026 2025 Amount % 2026 2025 Amount %
Cost of revenue $ 30,889  $ 14,973  $ 15,916  106  % $ 48,795  $ 29,989  $ 18,806  63  %
Sales and marketing 106,067  56,040  50,027  89  % 182,963  108,553  74,410  69  %
Research and development 58,193  32,068  26,125  81  % 94,738  63,902  30,836  48  %
General and administrative 70,060  56,890  13,170  23  % 140,305  112,866  27,439  24  %
Total stock-based compensation expense $ 265,209  $ 159,971  $ 105,238  66  % $ 466,801  $ 315,310  $ 151,491  48  %

Stock-based compensation expenses increased by $105 million, or 66%, and $151 million, or 48%, for the three and six months ended June 30, 2026 compared to the same periods in 2025, respectively. The increase was driven by expense from new grants awarded since June 30, 2025, including restricted stock units (“RSUs”), performance-based RSUs (“P-RSUs”), and stock appreciation rights (“SARs”), partially offset by reductions in expense from equity awards that became fully vested and forfeitures.
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Interest Income

Three Months Ended
June 30, Change Six Months Ended
June 30, Change
2026 2025 Amount 2026 2025 Amount
Interest income $ 77,505  $ 56,255  $ 21,250  $ 143,899  $ 106,696  $ 37,203 

Interest income increased by $21 million and $37 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025 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

Three Months Ended
June 30, Change Six Months Ended
June 30, Change
2026 2025 Amount 2026 2025 Amount
Other income (expense), net $ 91,836  $ 6,596  $ 85,240  $ 160,045  $ 3,423  $ 156,622 

Other income (expense), net changed by $85 million and $157 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025 primarily due to a realized gain and upward adjustments on privately-held equity securities and net unrealized gains on publicly-traded equity securities.
Provision for Income Taxes

Three Months Ended
June 30, Change Six Months Ended
June 30, Change
2026 2025 Amount 2026 2025 Amount
Provision for income taxes $ 15,383  $ 3,596  $ 11,787  $ 27,582  $ 9,195  $ 18,387 

Provision for income taxes increased by $12 million and $18 million, respectively, for the three and six months ended June 30, 2026 compared to the same periods in 2025. The increases were primarily related to higher U.S. and foreign profits. For additional information see Note 10. Income Taxes in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Liquidity and Capital Resources
As of June 30, 2026, our principal sources of liquidity were cash, cash equivalents, and short-term U.S. Treasury securities totaling $9.2 billion. We generated positive cash flow from operations for the six months ended June 30, 2026. 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):

Six Months Ended June 30,
2026 2025
Net cash provided by (used in):
Operating activities $ 2,115,332  $ 849,514 
Investing activities (1,509,665) (2,007,287)
Financing activities 8,378  (22,447)
Effect of foreign exchange on cash, cash equivalents, and restricted cash (2,112) 11,518 
Net increase (decrease) in cash, cash equivalents, and restricted cash $ 611,933  $ (1,168,702)

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Operating Activities
Net cash provided by operating activities was $2.1 billion and $0.8 billion for the six months ended June 30, 2026 and 2025, respectively. The increase was primarily driven by revenue growth, partially offset by timing of billings to and payments from customers.
Investing Activities
Net cash used in investing activities was $1.5 billion and $2.0 billion for the six months ended June 30, 2026 and 2025, respectively. The decrease in cash used in investing activities was primarily due to a higher amount of proceeds from sales and redemptions of marketable securities offsetting increased purchases of short-term U.S. Treasury securities compared to prior year.
Financing Activities
Net cash provided by financing activities was $8 million for the six months ended June 30, 2026 and net cash used by financing activities was $22 million for the six months ended June 30, 2025. Financing cash inflows consisted primarily of proceeds from the exercise of common stock options. For the six months ended June 30, 2025, financing cash outflows were driven by taxes paid related to the net share settlement of SARs and repurchases of our Class A common stock.
Material Cash Requirements
Our contractual obligations and commitments primarily consist of operating lease commitments for our facilities and non-cancelable purchase commitments related to third-party cloud hosting services. Except as disclosed in Note 7. Commitments and Contingencies in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there have been no additional material changes in our contractual obligations and commitments other than in the ordinary course of business since our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission (“SEC”) on February 17, 2026.
As of June 30, 2026, we had no outstanding debt balances and additional available and undrawn revolving commitments of $500 million under our credit facility. For more information, see Note 6. Debt in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
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 condensed consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with GAAP. The preparation of condensed 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.
There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates discussed in the Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 17, 2026, except as described in Note 2. Significant Accounting Policies to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Recent Accounting Pronouncements
For information on recently issued accounting pronouncements, if any, refer to Note 2. Significant Accounting Policies in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
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ITEM 3. 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.
Market Risk
As of June 30, 2026, we held publicly-traded equity securities valued at $184 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 June 30, 2026, we held privately-held equity securities valued at $167 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 condensed 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, EUR, 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 condensed 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.

ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures are designed to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Our management, with the participation and supervision of our Chief Executive Officer and our Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief
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Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were, in design and operation, effective at a reasonable assurance level.
Changes in Internal Controls Over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on the Effectiveness of Controls
The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, in designing and evaluating the disclosure controls and procedures, management recognizes that any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute, assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Moreover, 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. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.
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PART II - OTHER INFORMATION

ITEM 1. 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.
For information on legal proceedings, refer to Note 7. Commitments and Contingencies — Litigation and Legal Proceedings in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS
Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our condensed consolidated financial statements and accompanying notes, before making a decision to invest in our Class A common stock. Our business, financial condition, results of operations, or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. If any of the risks actually occur, our business, financial condition, results of operations, and prospects could be adversely affected. In that event, the trading price of our Class A common stock could decline, and you could lose part or all of your investment.
Risk Factor Summary
Our business is subject to numerous risks and uncertainties that you should consider before investing in our Class A common stock. These risks are described more fully below and include, but are not limited to, risks relating to the following:
• we may not be able to sustain our revenue growth;
• our sales efforts involve considerable time and expense and our sales cycle is often long and unpredictable;
• a limited number of customers account for a substantial portion of our revenue;
• we may not realize the full deal value of our customer contracts;
• we anticipate our operating expenses will continue to increase and we may not be able to maintain profitability in the future;
• our results of operations and our key business measures are likely to fluctuate significantly on a quarterly basis;
• seasonality may cause fluctuations in our results of operations and financial position;
• we may not successfully develop and deploy new technologies (such as technologies incorporating AI) to address the needs of our customers;
• we may not be able to maintain and enhance our brand and reputation;
• our reputation and business may be harmed by news or social media coverage or other external scrutiny of Palantir or our leadership;
• we may be unable to hire, retain, train, and motivate qualified personnel and senior management and deploy our personnel and resources to meet customer demand;
• we may be unable to successfully build, expand, and deploy our marketing and sales organization;
• our platforms are complex and may have a lengthy implementation process;
• exclusive arrangements or unique terms with customers or partners may result in significant risks or liabilities to us;
• we face intense competition in our markets;
• our platforms must operate with third-party products and services;
• the market for our platforms and services may develop more slowly than we expect;
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• we may be unable to maintain or properly manage our culture as we grow;
• we may not enter into relationships with potential customers if we consider their activities to be inconsistent with our organizational mission or values;
• joint ventures, channel sales relationships, platform partnerships, and strategic alliances may be unsuccessful;
• we may not be successful in executing our strategy to increase our sales to larger customers;
• breach of the systems of any third parties upon which we rely, our customers’ systems, locations, or environments, or our internal systems or unauthorized access to data;
• we have made and may continue to make strategic investments to support key business initiatives, including in privately-held and publicly-traded companies, as well as alternative investments, and we may not realize a return on these investments;
• issues raised by the use of AI (including machine learning, large language, and other generative or agentic AI models and applications, and software functionality to operationalize the foregoing) in our platforms and business may result in reputational harm or liability;
• we depend on computing infrastructure of third parties and they may experience errors, disruption, performance problems, or failure;
• we may fail to adequately obtain, maintain, protect, and enforce our intellectual property and other proprietary rights;
• we may be subject to intellectual property rights claims;
• there may be real or perceived errors, failures, defects, or bugs in our platforms;
• we rely on the availability of third-party technology that may be difficult to replace or that may cause errors;
• our business is subject to complex and evolving U.S. and non-U.S. laws and regulations regarding privacy, data protection and security, technology protection, and other matters;
• our non-U.S. sales and operations subject us to additional risks and regulations;
• we may encounter unfavorable outcomes in legal, regulatory, and administrative inquiries and proceedings;
• we may fail to receive and maintain government contracts or there may be changes in the contracting or fiscal policies of the public sector;
• many of our customer contracts may be terminated by the customer at any time for convenience and may contain other provisions permitting the customer to discontinue contract performance;
• there may be a decline in the U.S. and other government budgets, changes in spending or budgetary priorities, or delays in contract awards; and
• the multi-class structure of our common stock, the Founder Voting Trust Agreement, and the Founder Voting Agreement concentrate voting power with certain stockholders, in particular, Stephen Cohen, Alexander Karp, and Peter Thiel (our “Founders”) and their affiliates.
Risks Related to Our Business and Industry
We may not be able to sustain our revenue growth in the future.
Although our revenue has increased in recent periods, there can be no assurances that our revenue will continue to grow or do so at current rates, and you should not rely on the revenue of any prior quarterly or annual period as an indication of our future performance. Our revenue growth rate has fluctuated in the past, and may continue to fluctuate in future periods. In addition, as we continue to expand our platform and product offerings, or experience greater adoption of certain of our platform and product offerings, we have and may continue to experience variability in our revenue growth in certain markets or with certain customer segments relative to other markets or customer segments. In recent periods, the United States has represented an increasing portion of our total revenue. If the portion of total revenue attributable to the United States remains at current levels or continues to increase, our business and financial condition could be more exposed to any future adverse conditions in the United States, including, but not limited to, macroeconomic conditions, fluctuating interest rates, monetary policy changes, supply chain disruptions, geopolitical or economic uncertainty, the potential or actual imposition of tariffs or other impacts on trade relations, and other factors. Many factors may contribute to declines or variability in our revenue growth, including macroeconomic factors, increased competition, slowing demand for our platforms from existing and new customers, a failure by us to continue capitalizing on growth opportunities, terminations of existing contracts or failure to exercise existing options by our customers, and the maturation of our business, among others. If our revenue growth or revenue growth rate declines
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overall, or with respect to certain areas of our business, our business, financial condition, and results of operations could be adversely affected.
Our sales efforts involve considerable time and expense, and our sales cycle is often long and unpredictable.
Our results of operations may fluctuate, in part, because of the intensive nature of our sales efforts and the length and unpredictability of our sales cycle. As part of our standard sales efforts, we invest considerable time and expense evaluating the specific organizational needs of our potential customers and educating these potential customers about the technical capabilities and value of our platforms and services. We often also provide our platforms to potential customers (including individual users at such customers) at no or low cost initially to them for evaluation purposes through short-term pilot deployments of our platforms, including at bootcamps, and there is no guarantee that we will be able to convert customers from these short-term pilot deployments to longer-term revenue-generating contracts. We may continue to modify and update our sales efforts to meet market demand and the organizational needs of our potential customers, including to implement new go-to-market mechanisms or self-service models, or to collaborate with third party service providers, and any of these changes may not be successful and could increase our operating expenses. In addition, we have grown, and may continue to grow, our direct sales force, and our sales efforts have historically depended on the significant involvement of our senior management team. The length of our sales cycle, from initial demonstration of our platforms to sale of our platforms and services, tends to be long and varies substantially from customer to customer. Our sales cycle often lasts six to nine months but can extend to a year or more for some customers. Because decisions to purchase our platforms involve significant financial commitments, potential customers generally evaluate our platforms at multiple levels within their organization, each of which often have specific requirements, and typically involve their senior management.
Our results of operations depend on sales to enterprise customers, which make product purchasing decisions based in part or entirely on factors, or perceived factors, not directly related to the features of the platforms, including, among others, that customer’s projections of business growth, uncertainty about macroeconomic conditions (including as a result of the ongoing Russia-Ukraine conflict and related economic sanctions, the conflict resulting from Hamas’ attack on Israel and the ongoing conflicts in the Middle East, including the escalation of hostilities resulting from the recent strikes by the United States and Israel on Iran and retaliatory strikes related thereto, fluctuating interest rates, monetary policy changes, foreign currency fluctuations, or the potential or actual imposition of tariffs or other impacts on trade relations), capital budgets, anticipated cost savings from the implementation of our platforms, potential preference for such customer’s internally-developed software solutions, perceptions about our business and platforms, more favorable terms offered by potential competitors, and previous technology investments. In addition, certain decision makers and other stakeholders within our potential customers tend to have vested interests in the continued use of internally developed or existing software, which may make it more difficult for us to sell our platforms and services. As a result of these and other factors, our sales efforts typically require an extensive effort throughout a customer’s organization, a significant investment of human resources, expense and time, including by our senior management, and there can be no assurances that we will be successful in making a sale to a potential customer. If our sales efforts to a potential customer do not result in sufficient revenue to justify our investments, including our investments in sales and marketing, our business, financial condition, and results of operations could be adversely affected.
Historically, existing customers have expanded their relationships with us, which has resulted in a limited number of customers accounting for a substantial portion of our revenue. If existing customers do not make subsequent purchases from us or renew their contracts with us, or if our relationships with our largest customers are impaired or terminated, our revenue could decline, and our results of operations would be adversely impacted.
We derive a significant portion of our revenue from existing customers that expand their relationships with us. Increasing the size and number of the deployments of our existing customers is a major part of our growth strategy. We may not be effective in executing this or any other aspect of our growth strategy.
Our top three customers together accounted for 16% and 17% of our revenue for the years ended December 31, 2025 and 2024, respectively, and 16% and 17% of our revenue for the six months ended June 30, 2026 and 2025, respectively. Our top three customers by revenue, for the six months ended June 30, 2026, have been with us for an average of fifteen years as of June 30, 2026. Certain of our customers, including customers that represent a significant portion of our business, have in the past reduced, and others may choose in the future to reduce, their spend with us or terminated their agreements with us, which has reduced our anticipated future payments or revenue from these customers, and which has required us to refund some previously paid amounts to these customers. It is not possible for us to predict the future level of demand from our larger customers for our platforms and applications.
While we generally offer contract terms of one to five years in length, our customers sometimes enter into shorter-term contracts which may not provide for automatic renewal and may require the customer to opt-in to extend the term. Our customers have no obligation to renew, upgrade, or expand their agreements with us after the terms of their existing agreements have expired. In addition, many of our customer contracts permit the customer to terminate their contracts with us with notice periods of varying lengths. If one or more of our customers terminate their contracts with us, whether for convenience, for
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default in the event of a breach by us, or for other reasons specified in our contracts, as applicable; if our customers elect not to renew their contracts with us; if our customers renew their contractual arrangements with us for shorter contract lengths or for a reduced scope; or if our customers otherwise seek to renegotiate terms of their existing agreements on terms less favorable to us, our business and results of operations could be adversely affected. This adverse impact would be even more pronounced for customers that represent a material portion of our revenue or business operations.
Our ability to renew or expand our customer relationships may decrease or vary as a result of a number of factors, including our customers’ satisfaction or dissatisfaction with our platforms and services, the frequency and severity of software and implementation errors, our platforms’ reliability, our pricing, harm to our reputation, the effects of general economic conditions, competitive offerings or alternatives, or reductions in our customers’ spending levels. If our customers do not renew or expand their agreements with us or if they renew their contracts for shorter lengths or on other terms less favorable to us, our revenue may grow more slowly than expected or decline, and our business could suffer. Our business, financial condition, and results of operations would also be adversely affected if we face difficulty collecting our accounts receivable from our customers or if we are required to refund customer deposits.
Achieving renewal or expansion of deployments may require us to increasingly engage in sophisticated and costly sales efforts that may not result in additional sales. In addition, our customers’ decisions to expand the deployment of our platforms depends on a number of factors, including general economic conditions, the functioning of our platforms, the ability of our employees to assist our customers in identifying new use cases, modernizing their data architectures, and achieving success with data-driven initiatives, and our customers’ satisfaction with our services. If our efforts to expand within our existing customer base are not successful, our business may suffer.
We may not realize the full deal value of our customer contracts, which may result in lower than expected revenue.
As of December 31, 2025, the total remaining deal value, as defined in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Total Remaining Deal Value of our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 17, 2026, was $11.2 billion. Of our total remaining deal value, as of December 31, 2025, $6.8 billion was the remaining deal value of our contracts with commercial customers and $4.4 billion was the remaining deal value of our contracts with government customers.
Many of these 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.
We historically have not realized all of the revenue from the full deal value of our customer contracts, and we may not do so in the future. This is because the actual timing and amount of revenue under contracts included are subject to various contingencies, including exercise of contractual options, customers not terminating their contracts, renegotiation of contracts, and other macroeconomic factors that may potentially inhibit a customer’s ability to pay. In addition, delays in the completion of the U.S. government’s budgeting process, the use of continuing resolutions, and a potential lapse in appropriations, or similar events in other jurisdictions, have and could in the future adversely affect our ability to timely recognize revenue under certain government contracts. If we are unable to realize all of the revenue from the full deal value of our customer contracts, our financial condition and results of operations could be adversely affected.
If we fail to manage future growth effectively, our business could be harmed.
Since our founding in 2003, we have experienced rapid growth. We operate in a growing market and have experienced, and may continue to experience, significant expansion of our operations. This growth has placed, and may continue to place, a strain on our employees, management systems, operational, financial, and other resources. As we have grown, we have increasingly managed larger and more complex deployments of our platforms and services with a broader base of government and commercial customers. As we continue to grow, we face challenges of integrating, developing, retaining, and motivating our employee base of 4,401 full-time employees as of June 30, 2026 in various countries around the world. In the event of continued growth of our operations, our operational resources, including our information technology systems, our employee base, or our internal controls and procedures may not be adequate to support our operations and deployments. Managing our growth may require significant expenditures and allocation of valuable management resources, improving our operational, financial, and management processes and systems, and effectively expanding, training, and managing our employee base. As our organization continues to grow and operate as a public company, we may find it increasingly difficult to maintain the benefits of our traditional company culture, including our ability to quickly respond to customers, and avoid unnecessary delays that may be associated with a formal corporate structure.
In addition, our prior rapid growth may make it difficult to evaluate our future prospects. Our ability to forecast our future results of operations is subject to a number of uncertainties, including our ability to effectively plan for and model future
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growth. We have encountered in the past, and may encounter in the future, risks and uncertainties frequently experienced by growing companies with global operations in rapidly changing industries.
If we fail to achieve the necessary level of efficiency in our organization as it grows, or if we are not able to accurately forecast future growth, our business, financial condition, and results of operations would be harmed. This could negatively affect our business performance or ability to hire or retain personnel in the near- or long-term.
We anticipate our operating expenses will continue to increase and we may not be able to maintain profitability in the future.
While we remain focused on operating efficiently, we anticipate that our operating expenses will continue to increase in the future. As we continue to expand our business, industry verticals, and the breadth of our operations, upgrade our infrastructure, hire additional employees, expand into new markets, invest in research and development, invest in sales and marketing, lease more real estate to accommodate our anticipated future growth, and incur costs associated with general administration, including expenses related to being a public company, we expect that our costs of revenue and operating expenses will continue to increase. To the extent we are successful in increasing our customer base, we may also incur increased expenses or losses because the costs associated with acquiring and growing our customers and with research and development are generally incurred upfront, while our revenue from customer contracts is generally recognized over the contract term. Furthermore, our sales model has historically required us to spend months and invest significant resources working with customers on pilot deployments at no or low cost to them. Though we have integrated shorter, more cost-effective programs such as bootcamps, these initial deployments (including bootcamps) may result in no or minimal future revenue. We may also encounter unforeseen or unpredictable factors, including adverse macroeconomic conditions, unforeseen operating expenses, or other complications or delays, which may result in increased costs, or cause us to generate less revenue from our customers than we anticipated. We may not be able to continue to increase our revenue at a rate sufficient to offset increases in our costs of revenue and operating expenses in the near term or at all, which would prevent us from maintaining profitability in the future. Any failure by us to maintain or increase profitability in the future or achieve our profitability targets could adversely affect our business, financial condition, and results of operations.
Our results of operations and our key business measures are likely to fluctuate significantly on a quarterly basis in future periods and may not fully reflect the underlying performance of our business, which makes our future results difficult to predict and could cause our results of operations to fall below expectations.
Our quarterly results of operations, including cash flows, have fluctuated significantly in the past and are likely to continue to do so in the future. Accordingly, the results of any one quarter should not be relied upon as an indication of future performance. Our quarterly results, financial position, and operations are likely to fluctuate as a result of a variety of factors, many of which are outside of our control, and as a result, may not fully reflect the underlying performance of our business. Fluctuation in quarterly results may also negatively impact the value of our Class A common stock.
We typically close a large portion of our sales in the last several weeks of a quarter, which impacts our ability to plan and manage margins and cash flows. Our sales cycle is often long, and it is difficult to predict exactly when, or if, we will actually make a sale with a potential customer, particularly large government and commercial customers. As a result, large individual sales have, in some cases, occurred in quarters subsequent to those we anticipated, or have not occurred at all. The loss or delay of one or more large sales transactions in a quarter would impact our results of operations and cash flow for that quarter and any future quarters in which revenue from that transaction is lost or delayed. In addition, downturns in new sales may not be immediately reflected in our revenue because we generally recognize revenue over the term of our contracts. The timing of customer billing and payment varies from contract to contract. A delay in the timing of receipt of such collections, or a default on a large contract, may negatively impact our liquidity for the period and in the future. Because a substantial portion of our expenses are relatively fixed in the short term and require time to adjust, our results of operations and liquidity would suffer if revenue fell below our expectations in a particular period.
Other factors that may cause fluctuations in our quarterly results of operations and financial position include, without limitation, those listed below:
• the success of our sales and marketing efforts, including the success of our pilot deployments (including bootcamps);
• our ability to increase our contribution margins;
• the timing of expenses and revenue recognition, including from changes in accounting assumptions or estimates;
• the timing and amount of payments received from our customers;
• termination of one or more large contracts by customers, including for convenience;
• the time and cost-intensive nature of our sales efforts and the length and variability of sales cycles;
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• the amount and timing of operating expenses related to the development, maintenance, and expansion of our business and operations;
• the timing and effectiveness of new sales and marketing initiatives;
• changes in our pricing policies or those of our competitors;
• the timing and success of new platforms, products, features, and functionality introduced by us or our competitors;
• interruptions or delays in our O&M services;
• cyberattacks and other actual or perceived data, privacy, cyber or physical security breaches or incidents and related expenses;
• our ability to hire and retain employees, in particular, those responsible for operations and maintenance of and the selling or marketing of our platforms, and develop and retain talented sales personnel who are able to achieve desired productivity levels in a reasonable period of time and provide sales leadership in areas in which we are expanding our sales and marketing efforts;
• the amount and timing of our stock-based compensation expenses;
• the amount and timing of employer payroll taxes related to stock-based compensation resulting from increases in our stock price;
• changes in the way we organize and compensate our employees;
• changes in the way we operate and maintain our platforms;
• unforeseen negative results in operations from our partnerships;
• changes in the competitive dynamics of our industry;
• the cost of and potential outcomes of existing and future claims or litigation, which could have a material adverse effect on our business;
• changes in laws and regulations that impact our business, such as the FASA or the European Union (“EU”) AI Act (“EU AIA”);
• indemnification payments to our customers or other third parties;
• ability to scale our business with increasing demands;
• the timing of expenses related to any future acquisitions; and
• general economic, regulatory, and market conditions, including the impacts of ongoing conflicts, such as those in Russia-Ukraine, Israel, and the broader Middle East, including the recent escalation of hostilities in Iran and surrounding nations, and any related economic sanctions and regional instability, fluctuating interest rates, monetary policy changes, foreign currency fluctuations, or the potential or actual imposition of tariffs or other impacts on trade relations.
In addition, many of our contracts contain termination for convenience provisions, and we may be obligated to repay prepaid amounts or otherwise not realize anticipated future revenue should we fail to provide products or future services as anticipated. These factors make it difficult for us to accurately predict financial metrics for any particular period.
The variability and unpredictability of our quarterly results of operations, cash flows, or other operating metrics could result in our failure to meet our expectations or those of analysts that cover us or investors with respect to revenue or other key metrics for a particular period. If we fail to meet or exceed such expectations for these or any other reasons, the trading price of our Class A common stock could fall, and we could face costly lawsuits. We and certain of our officers and directors were sued in purported class action lawsuits and derivative lawsuits, which could result in substantial costs and a diversion of our management’s attention and resources. For additional information see Note 7. Commitments and Contingencies in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Seasonality may cause fluctuations in our results of operations and financial position.
Historically, the first quarter of our year generally has relatively lower sales, and sales generally increase in each subsequent quarter with substantial increases during our third and fourth quarters ending September 30 and December 31, respectively. We believe that this seasonality results from a number of factors, including:
• the fiscal year end procurement cycle of our government customers, and in particular U.S. government customers which have a fiscal year end of September 30;
• the fiscal year budgeting process for our commercial customers, many of which have a fiscal year end of December 31;
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• seasonal reductions in business activity during the summer months in the United States, Europe, and certain other regions; and
• timing of projects and our customers’ evaluation of our work progress.
This seasonality has historically impacted and may in the future continue to impact the timing of collections and recognized revenue. Because a significant portion of our customer contracts are typically finalized near the end of the year, and we typically invoice customers shortly after entering into a contract, we may receive a portion of our customer payments near the end of the year and record such payment as an increase in deferred revenue or customer deposits (“contract liabilities”), while the revenue from our customer contracts is generally recognized over the contract term. While we have historically billed and collected payments for multiple contract years from certain customers in advance, we have shifted, and may continue to shift, to collecting payments on an annual or other basis, including in arrears.
While this has been the historical seasonal pattern of our quarterly sales, we believe that our customers’ required timing for certain new government or commercial programs requiring new software may outweigh the nature or magnitude of seasonal factors that might have influenced our business to date. As a result, we may experience future growth from additional government or commercial mandates that do not follow the seasonal purchasing and evaluation decisions by our customers that we have historically observed.
For example, increased government spending on technology aimed at national defense, financial or policy regulation, cybersecurity, or healthcare mandates may drive customer demand at different times throughout our year, the timing of which we may not be able to anticipate and may cause fluctuations in our results of operations. The timing of our fiscal quarters and the U.S. federal government’s September 30 fiscal year end also may impact sales to governmental agencies in the third quarter of our year, offsetting, at least in part, the otherwise seasonal downturn we have historically observed in later summer months.
Our rapid growth in recent years may obscure the extent to which seasonality trends have affected, and may continue to affect, our business. We expect that seasonality will continue to materially impact our business in the future and may become more pronounced over time. The seasonality of our business may cause continued or increased fluctuations in our results of operations and cash flows, which may prevent us from achieving our quarterly or annual forecasts or meeting or exceeding the expectations of research analysts or investors, which in turn may cause a decline in the trading price of our Class A common stock.
If we do not successfully develop and deploy new technologies (such as technologies incorporating AI) to address the needs of our customers, our business and results of operations could suffer.
Our success has been based on our ability to design software and products that enable the integration of data into a common operating environment to facilitate advanced data analysis, knowledge management, and collaboration. We spend substantial amounts of time and money researching and developing new technologies and enhanced versions of existing features to meet our customers’ and potential customers’ rapidly evolving needs. There is no assurance that our enhancements to our platforms or our new product features, capabilities, or offerings, including new platforms or product modules will, either individually or in the aggregate, be compelling to our customers, gain market acceptance, or have a positive or material impact on our business, financial condition, or results of operations, in each case in a timely or cost-effective manner. For example, we and our peers and competitors are investing more significantly in AI (including machine learning, large language, and other generative and agentic AI models, and software functionality to operationalize the foregoing). There are significant risks involved in deploying AI and there can be no assurance that using AI in our platforms and products will enhance or be beneficial to our business, including our profitability. Further, other companies may develop products that are similar to ours, or adopt and implement AI more successfully or at a quicker pace than us. If our research and development investments do not accurately anticipate customer demand or if we fail to develop our platforms in a manner that satisfies customer preferences or needs in a timely and cost-effective manner, we may fail to retain our existing customers or increase demand for our platforms.
The introduction of new products and services by competitors or the development of entirely new technologies to replace existing offerings could make our platforms obsolete or adversely affect our business, financial condition, and results of operations. We may experience difficulties with software development, design, or marketing that delay or prevent our development, introduction, or implementation of new platforms, features, or capabilities. We have in the past experienced delays in our internally planned release dates of new features and capabilities, and there can be no assurance that new platforms, features, or capabilities will be released according to schedule. Any delays could result in adverse publicity, loss of revenue or market acceptance, or claims by customers brought against us, any of which could harm our business. Moreover, the design and development of new platforms or new features and capabilities to our existing platforms may require substantial investment, and we have no assurance that such investments will be successful. If customers do not widely adopt our new platforms, products, features, and capabilities, we may not be able to realize a return on our investment and our business, financial condition, and results of operations may be adversely affected.
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