The Information
Is Palantir soaking up all the growth in the enterprise software sector? That seems like a reasonable question judging by the company’s first-quarter results released on Monday, which showed 85% revenue growth. That’s an astounding growth rate for a business that’s 23 years old. Even better, Palantir turns a lot of that revenue into pure cash. Indeed, its free cash flow of $892 million in the quarter was more than its revenue in the year-earlier quarter. (This article from March explains why Palantir is winning so much business.) Palantir CEO Alex Karp pointed out that free cash flow factoid in a chest-thumping commentary for analysts on Monday, although frequent microphone outages undermined the force of his hyperbole a bit. (Those outages created a comedic scene on the YouTube video of the earnings call, where a hand kept appearing from the side offering Karp replacement microphones to fix the problem.) For all his over-the-top comments, however, Karp seems to have a point: Palantir is doing astoundingly well, despite deep pessimism about how AI will undermine enterprise software businesses.
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