Palantir's US Commercial Revenue Tops Government for First Time as Q3 Sales Jump 96%

Palantir Technologies said Monday that its U.S. commercial business generated more revenue than its U.S. government business for the first time in the company's history, as third-quarter sales rose 96% from a year earlier to $2.313 billion.

The quarter beat Wall Street's forecasts on both lines. Analysts polled by LSEG had expected adjusted earnings of 41 cents a share on revenue of $2.18 billion, CNBC reported. Palantir posted adjusted earnings per share of $0.44, matching its GAAP diluted figure, and quarterly revenue topped $2 billion for the first time.

How far ahead is commercial now?

U.S. commercial revenue grew 148% year over year and 29% from the second quarter to $984 million. U.S. government revenue rose 96% year over year and 18% sequentially to $953 million, leaving the commercial segment about $31 million ahead. Combined U.S. revenue reached $1.937 billion, up 119% from a year ago and accounting for roughly 84% of the company's total.

"Our U.S. commercial revenue has surpassed our U.S. government revenue for the first time in our company's history," Co-Founder and Chief Executive Alex Karp said in the company's earnings release. In his third-quarter shareholder letter, Karp wrote that "our sequential growth in U.S. commercial of 29% would be an astonishing annual growth rate of any public software company in America."

Deal activity supported the shift. Palantir closed:

• 212 deals worth at least $1 million
• 107 deals worth at least $5 million
• 64 deals worth at least $10 million

Total contract value closed in the quarter was $2.918 billion, up 6% year over year, of which $1.463 billion came from U.S. commercial customers. U.S. commercial remaining deal value stood at $6.517 billion, up 79% from a year earlier but only 4% above the prior quarter.

What happened to profit?

The growth came with wider margins. GAAP net income attributable to common stockholders was $1.128 billion, or 44 cents a diluted share, compared with $475.6 million, or 18 cents, in the third quarter of 2025, the company's financial statements show. GAAP operating income was $1.085 billion, a 47% margin, and adjusted operating income was $1.427 billion, a 62% margin, up from 51% a year earlier.

Cash generation followed the same pattern. Cash from operations totaled $1.205 billion and adjusted free cash flow came to $1.216 billion, a 53% margin. Palantir ended September with $10.4 billion in cash, cash equivalents and U.S. Treasury securities. The company put its "Rule of 40" score, which adds revenue growth to adjusted operating margin, at 158%.

How much did guidance move?

For the fourth quarter, Palantir guided to revenue of $2.649 billion to $2.653 billion and adjusted operating income of $1.640 billion to $1.644 billion. It lifted its full-year 2026 revenue forecast to $8.530 billion to $8.534 billion, which the company said represents 91% growth, and now expects U.S. commercial revenue of more than $3.559 billion, growth of at least 143%.

In its second-quarter release, Palantir had guided to U.S. commercial revenue of more than $3.424 billion, or growth of at least 134%.

The company also raised its full-year adjusted operating income outlook to $5.245 billion to $5.249 billion and its adjusted free cash flow target to $4.8 billion to $5.0 billion, while repeating that it expects GAAP operating income and net income in every quarter of the year.

Why does the milestone matter?

For enterprise software buyers, the figures put a number on how far Palantir's commercial push, built on its Foundry, Ontology and AIP products, has come. The release counts nine-month revenue of $5.881 billion, nearly double the $3.069 billion recorded in the same period of 2025.

The crossover marks a structural change for a company long identified with government and defense contracts, and it signals that demand for AI deployment software among U.S. corporations now matches federal spending power. Palantir scheduled a public webcast for 5:00 p.m. ET Monday to discuss the results, and the raised guidance sets a higher bar for the fourth quarter just as investors weigh how sustainable triple-digit commercial growth remains.