Palantir Technologies : Accompanying Remarks↗

Published: 2022-02-17 07:38:08 ET PLTR

PALANTIR TECHNOLOGIES INC.

Accompanying Remarks

2021 Financial Results

February 17, 2022

Our business grew significantly last year.

We generated $1.54 billion in revenue in 2021, representing a growth rate of 41% over the year before.

Commercial

Our overall commercial revenue growth accelerated each quarter in 2021, resulting in 47% year- over-year growth in the fourth quarter.

Our U.S. commercial business generated more than $200 million in annual revenue, doubling for the second year in a row.

Our U.S. commercial net dollar retention was 150% in 2021, and we believe that rapid U.S. commercial customer acquisition will continue to drive U.S. commercial growth.

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We started 2021 with 17 U.S. commercial customers and ended the year with 80 commercial customers. We have nearly quintupled the customer base and believe there is significant opportunity ahead.

We exceeded our sales force hiring goal in 2021 across our business and across geographies. We started 2021 with 12 U.S. commercial sales representatives, six of whom had been with us for more than nine months, and ended the year with 80 U.S. commercial sales representatives, 25 of whom had been with us for more than nine months. The team contributed to our strong U.S. commercial results, and we plan to continue to hire aggressively.

In 2021, non-U.S. commercial revenue growth was 16%, and net dollar retention was 103%, which lagged behind the U.S. We saw growth accelerate in each quarter of 2021 over the same periods in the year prior. We closed substantial deals in Europe, including with Merck KGaA and Peugeot. In South Korea, we announced our partnership with Hyundai Heavy Industries, the world's largest shipbuilder. In Japan, we accelerated our work with Komatsu and Fujitsu through Palantir Japan Technologies K.K., our joint venture with Sompo Holdings, Inc.

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In 2022, we intend to adopt a hiring plan for our non-U.S. commercial business that is similarly aggressive to the one we implemented for our U.S. commercial business in 2021, including hiring sales representatives across France, Germany, Switzerland, Spain, Italy, the Nordics, the United Kingdom, Benelux, the Middle East, South Korea, and elsewhere.

We also expanded our partner ecosystem across our commercial business in 2021, including with IBM, Stern Stewart, AlixPartners, and DataRobot. We launched Foundry for Builders and our strategic investment program to capture the opportunity for Foundry to be the developer platform for the next generation of companies in the United States and abroad.

Government

In the fourth quarter of 2021, our government business revenue grew 26% year-over-year, and for the full year, government revenue grew 47%, with a net dollar retention of 146%.

Annual average revenue per government customer grew from $6.8 million in 2020 to $10.0 million in 2021.

Against a backdrop of growing geopolitical threats, our software continued to serve the needs of our most vital institutions. Our newest products, from Edge AI and MetaConstellation to Gaia and Cosmos, are being leveraged on the front lines of the near-peer fight. Gotham, Foundry, and Apollo are coming together to deliver AI-enabled mission command across logistics, readiness, operations, planning, and intelligence through all war-fighting domains, from space to mud.

U.S. Space Force replaced the Joint Space Operations Center Mission System (JMS) with Foundry. Space Force's Foundry instance, called WarpCore, is now the principal source of Space Situational Awareness: knowledge about where and when satellites are in orbit. Palantir also won its 3rd Program of Record in the Army's DCGS CD-2, with many more in pursuit. We continue to see significant potential in the Army's TITAN program, in which our participation demonstrates our ability to deliver complex, integrated hardware and software solutions.

Palantir's capabilities helped to power American and British noncombatant evacuation operations from Afghanistan. Our software was leveraged in the Global Information Dominance Experiment, enabling all 11 U.S. Department of Defense Combatant Commands to gather, analyze, and strategically act upon intelligence, operations, logistics, and supply data-advanced by AI. Our work on Project Brown Heron provided the U.S. Air Force and Space Force leadership with a full-stack solution for data-driven decisions regarding personnel, equipment, and training readiness. And Palantir's software was used by the United Kingdom's Royal Navy across a broad range of areas, from strategic workforce planning to supply chain management.

At the U.S. Department of Energy, Foundry has become the operational platform to safeguard America's nuclear stockpile. Our software has enabled the U.S. Department of Veterans Affairs to integrate data across its large IT landscape and ultimately deliver better care and services for

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our veterans. The U.S. Federal Aviation Administration used Foundry to help minimize disruptions to air travel and maximize passenger safety. And our public health work scaled across the U.S. Food and Drug Administration, U.S. Centers for Disease Control and Prevention, U.S. Department of Health and Human Services, and the U.S. National Institutes of Health, as well as the National Health Service in the United Kingdom, giving these agencies a single pane of data as they worked on the nation's top health priorities.

We continue to pursue a number of large opportunities with both the U.S. government and its allies, and in the United States we are monitoring the continuing resolution and budget negotiations while continuing to deliver our software to our partners where they need it most.

Product

In 2021, companies accelerated their adoption of Foundry as software infrastructure on which they are able to build their own software and deploy such software in the market.

In addition to existing products built on top of Foundry, including Skywise at Airbus and Athena at Swiss Re, Athinia was launched in Q4 2021 as part of a joint partnership with Merck KGaA to deliver software to drive quality and yield in semiconductor manufacturing. In addition, a top global pharmaceutical company launched a clinical trial harmonization offering on top of Foundry targeted at biopharmaceutical companies. Similar opportunities continue to develop across multiple industries.

Gotham continued to deliver new capabilities for the West and its allies against our most significant threats. We pushed our Edge AI capabilities into space, where Edge AI has powered first-of-its-kind image formation on board satellites to enable real-timegeo-registration, inferencing, and actioning.

Gotham's foundational investments in an industry-leading security model, cross-nationclassification-based access control, and unique information-sharing capabilities enabled allies in the Pacific theater to securely share and collaborate on emerging threats.

We built Apollo to enable us to continuously deliver Foundry and Gotham to new operational environments-from the public cloud to private clouds, classified environments, on-premise deployments, and at the extreme edge.

Additional Financial Results

We generated year-over-year revenue growth of 34% in Q4 2021, bringing fourth quarter revenue to $433 million. For the full year 2021, total revenue was $1.54 billion, up 41% year- over-year.

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Throughout 2021, we demonstrated strong margins across our business even as we continued to make investments to drive long-term growth. Fourth quarter 2021 adjusted operating income was $124 million, representing a margin of 29%, and for the full year 2021, we generated adjusted operating income of $473 million, representing a margin of 31%. Fourth quarter 2021 adjusted free cash flow was $104 million, representing a margin of 24%, and for the full year 2021, we generated $424 million in adjusted free cash flow, representing a margin of 28%.

We added 34 net new customers in the fourth quarter on a trailing twelve-month basis, and our total customer count grew 71% year-over-year to 237.

In Q4 2021, we continued to see acceleration across our commercial business. For the fourth quarter, total commercial revenue was $194 million, up 47% year-over-year and representing our fourth straight quarter of accelerating commercial revenue growth. U.S. commercial revenue growth accelerated to 132% year-over-year, as our investments in product and distribution continued to produce results in Q4 2021. For the full year 2021, U.S. commercial revenue was $201 million, representing 102% year-over-year growth and our second consecutive year of more than 100% annual growth.

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Disclaimer

Palantir Technologies Inc. published this content on 17 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 February 2022 12:37:08 UTC.