Palantir Technologies has undergone a remarkable financial transformation over the past several years — from a company burning through cash at an alarming rate to one that is now generating substantial and rapidly growing profits. Revenue has compounded at roughly 33% annually over both the past three and five years, and the most recent quarter (ending June 30, 2026) showed an operating margin of nearly 47% and a net margin above 54%, levels that would be impressive for any mature software business. The balance sheet is exceptionally clean, with a current ratio above 7x and effectively no debt. Capital expenditure requirements remain minimal, underscoring that this is a high-quality, asset-light software business. The core risk is not financial fragility — it is valuation: Palantir is priced for continued exceptional execution, and any slowdown in growth or margin expansion would be harshly punished by the market. For investors focused purely on the fundamentals of the underlying business, however, the trajectory here is unambiguously strong.
Snapshot & Big Picture
Palantir was founded in 2003, went public via direct listing in September 2020, and builds data analytics and AI platforms primarily for government intelligence agencies and large commercial enterprises. For most of its history it was deeply unprofitable, investing heavily in sales and product development while revenue scaled slowly. The inflection point came around 2022–2023, when the company began meaningfully cutting operating losses, and by fiscal year 2024 it had crossed into clear GAAP profitability. Fiscal year 2025 (ending December 31, 2025) saw revenue reach $4.48 billion with an operating margin of roughly 32% and a net margin of 36% — a stark contrast to the losses that defined its earlier years. The AI wave has been a significant tailwind, with Palantir's AIP (Artificial Intelligence Platform) product driving accelerated commercial adoption.
| Fiscal Year | Revenue | Gross Margin | Operating Margin | Net Margin |
|---|---|---|---|---|
| 2018 | $595M | 72.2% | -104.7% | -97.4% |
| 2019 | $743M | 67.4% | -77.6% | -78.1% |
| 2020 | $1,093M | 67.7% | -107.4% | -106.7% |
| 2021 | $1,542M | 78.0% | -26.7% | -33.7% |
| 2022 | $1,906M | 78.6% | -8.5% | -19.6% |
| 2023 | $2,225M | 80.6% | 5.4% | 9.4% |
| 2024 | $2,866M | 80.2% | 10.8% | 16.1% |
| 2025 | $4,475M | 82.4% | 31.6% | 36.3% |
Latest Quarter Snapshot
The most recent data available comes from the 10-Q filed August 4, 2026, covering the quarter ended June 30, 2026. This is more current than the annual figures and points to continued — and accelerating — momentum. Quarterly revenue came in at $1.94 billion. If annualized, that single quarter's revenue run-rate would approach $7.7 billion, well above the full fiscal year 2025 figure of $4.48 billion, suggesting that the growth rate in the business remains very high into 2026.
| Metric | Q2 2026 (Quarter Ended June 30, 2026) |
|---|---|
| Revenue | $1,935M |
| EBITDA | $919M |
| Gross Margin | 84.7% |
| Operating Margin | 47.1% |
| Net Margin | 54.9% |
| Current Ratio | 7.23x |
| Debt-to-Equity | 0.02x |
| Capital Expenditures | $7.4M |
| CapEx / Revenue | 0.38% |
The margin expansion evident in this quarter is striking. An operating margin of 47% and a net margin approaching 55% place Palantir among the most profitable software businesses by these measures. Gross margin has also continued to expand, reaching 84.7% in Q2 2026 versus 82.4% for full-year 2025 and 80.2% for full-year 2024, indicating improving unit economics as the platform scales.
Profitability
The profitability story at Palantir is one of the more dramatic multi-year turnarounds in large-cap technology. In 2020, the company lost more than $1 for every dollar of revenue it generated, with an operating margin of -107% and a net margin of -107%. Heavy stock-based compensation, an intensive forward-deployed engineering model, and aggressive sales investment all weighed on reported results. Beginning in 2021, gross margins improved sharply — jumping from ~68% in 2020 to ~78% in 2021 — as the revenue mix shifted toward higher-margin software delivery. Operating losses narrowed steadily from 2021 through 2022, and the company reached GAAP operating profitability for the first time in fiscal 2023 with a modest 5.4% operating margin. The pace of improvement then accelerated dramatically: operating margin reached 10.8% in 2024, 31.6% in 2025, and 47.1% in the most recent quarter. EBITDA followed the same trajectory, moving from deeply negative (-$1.16B in 2020) to $1.44 billion in fiscal 2025 and $919 million in Q2 2026 alone.
Financial Health
Palantir's balance sheet is a standout feature. The current ratio has climbed steadily from 1.67x in 2019 to 3.74x in 2020, 4.34x in 2021, 5.17x in 2022, 5.55x in 2023, 5.96x in 2024, 7.11x in 2025, and 7.23x in the most recent quarter. This means current assets are more than seven times current liabilities — an extremely conservative and liquid position. Debt-to-equity was not available in the filings for fiscal years 2022, 2023, 2024, and 2025 (reported as null), was 0.13x in 2020, and effectively 0x in 2021. The most recent quarterly filing shows a debt-to-equity of just 0.02x, confirming the company carries virtually no financial leverage. This is a business that is self-funding its growth with internally generated cash and does not depend on capital markets to operate.
Capital Expenditures: One of the most important qualities of Palantir's business model is its extremely low capital intensity. CapEx has remained modest in absolute dollar terms throughout its history and has declined as a percentage of revenue as the top line has scaled. In 2018, CapEx was $13.0M (2.18% of revenue). It moved between $12M and $40M annually through 2022 before declining to $15.1M in 2023 and $12.6M in 2024. In 2025, CapEx rose modestly in dollar terms to $33.9M but remained just 0.76% of revenue. The most recent quarter showed CapEx of only $7.4M, or 0.38% of revenue. This consistently sub-1% CapEx-to-revenue ratio tells you that Palantir is not a capital-hungry business — it does not need to spend heavily on physical infrastructure or equipment to grow. Nearly all of its value creation flows through software and human capital. The implication is that as revenue grows, an increasing share of incremental revenue drops to free cash flow, amplifying the profitability expansion already visible in the margin data.
| Period | Capital Expenditures | CapEx / Revenue |
|---|---|---|
| FY 2018 | $13.0M | 2.18% |
| FY 2019 | $13.1M | 1.76% |
| FY 2020 | $12.2M | 1.12% |
| FY 2021 | $12.6M | 0.82% |
| FY 2022 | $40.0M | 2.10% |
| FY 2023 | $15.1M | 0.68% |
| FY 2024 | $12.6M | 0.44% |
| FY 2025 | $33.9M | 0.76% |
| Q2 2026 (quarter) | $7.4M | 0.38% |
Growth
Palantir's revenue growth has been consistent and strong. The table below summarizes trailing compound annual growth rates as calculated from the annual 10-K filings.
| Window | Start Year | End Year | Start Revenue | End Revenue | CAGR |
|---|---|---|---|---|---|
| 3-Year | FY 2022 | FY 2025 | $1,906M | $4,475M | 32.9% |
| 5-Year | FY 2020 | FY 2025 | $1,093M | $4,475M | 32.6% |
| 10-Year | N/A | N/A | N/A | N/A | Not available — Palantir's SEC filing history does not extend back a full ten fiscal years from the current period, as the company went public in September 2020. |
The near-identical 3-year and 5-year CAGRs of ~33% indicate that Palantir's growth rate has been remarkably stable and has not materially decelerated over the medium term. Given that the most recent quarterly revenue run-rate implies significant acceleration into 2026, there is no sign in the reported data of a growth slowdown at this time.
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