Palantir Technologies Inc posted its slowest quarterly growth in revenue since going public in 2020 due to weak demand for its data analytics software in Europe, while a strong dollar weighed on its profit, sending its shares down 8.5 percent on Monday.
The company, known for its work with the US Central Intelligence Agency, has been trying to cut its reliance on uncertain government contracts by seeking more commercial business.
But in the third quarter, revenue from the segment declined nearly 3 percent to US$204 million (A$315 million) from the previous three months, raising doubts among Wall Street analysts about sustained revenue from commercial deals amid rising cost of borrowing.
“What I believe and other people should talk about is that we are going to see negative impacts because of strong dollar… because of sluggishness to adopt new technologies in Europe,” CEO Alexander Karp said on an earnings call.
The company once again leaned on renewals and expansions of existing US military deals in the third quarter, which helped it close about US$1 billion in government contracts.
Analysts had expected the Ukraine war to draw in more business to Palantir, but finance chief David Glazer said the timing of new government contracts remained uncertain.
“We saw some improvement in backlog, but government only grew by 4 percent quarter-over-quarter and commercial was actually down quarter-over-quarter, which is not something we want to see in a subscription model,” RBC Capital Markets analyst Rishi Jaluria said.
Palantir’s revenue rose 22 percent to US$477.9 million.
Palantir said it expects fourth-quarter revenue to be between US$508 million and US$510 million, excluding a US$5 million forex impact. Analysts on average expect revenue at US$502.7 million.