Palantir, the private Silicon Valley company whose software is used by the defense and intelligence communities, is pulling back the veil on its notoriously secretive business in advance of a looming, and much anticipated, IPO.
In an SEC filing this week, we’ve got a glimpse into the company’s revenue (and losses) and its CEO’s harsh criticism of his Silicon Valley peers. We’ll start with the latter: In a letter that was part of the company’s initial registration, Alexander Karp said Palantir seems “to share fewer and fewer of the technology sector’s values and commitments.” He said the company has “repeatedly turned down opportunities to sell, collect, or mine data.”
Karp also took a swing at tech companies that have resisted working for the Pentagon intelligence community. “Software projects with our nation’s defense and intelligence agencies, whose missions are to keep us safe, have become controversial, while companies built on advertising dollars are commonplace,” he wrote. “For many consumer internet companies, our thoughts and inclinations, behaviors and browsing habits, are the product for sale.”
In 2018, Google drew heat from employees who objected to the company’s efforts to help the Pentagon use artificial intelligence to identify and catalog people and objects in drone video feeds.
“Our software is used to target terrorists and to keep soldiers safe,” Karp wrote. “If we are going to ask someone to put themselves in harm’s way, we believe that we have a duty to give them what they need to do their job.”
Now to the financials: Palantir says it has 125 customers for its Gotham and Foundry platforms. The military and IC use Gotham “to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants,” according to the company’s filing.
The company claims it generated $742.6 million in revenue in 2019, up 25 percent from 2018, when revenue totled $595.4 million. So far this year, Palantir has generated $481.2 million, which it said is up 49 percent over the same period last year.
But, the company said it lost $579.6 million in 2019. This year it has already lost $164.7 million in the first half of 2020, but those losses are less than the $280.5 million it lost in the first half of 2019.
“The improvements in our operating results have principally been driven by increasing revenue and a significant decrease in the time and number of software engineers required to install and deploy our software platforms,” the filing states.
Palantir says its government business has improved dramatically since it won a 2018 lawsuit against the U.S. Army.
“Our victory in federal court has already had a significant impact on our business,” the filing states. “We generated a total of $51.9 million in revenue from our U.S. Army accounts from 2008 through September 2018, when the federal court ruled in our favor. After the ruling, in less than two years, between October 2018 and June 2020, we generated $134.5 million in revenue from those accounts.”
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