Palantir's sales rose 96% and US companies now pay it more than Washington, but new deals grew just 6%

For most of its life, Palantir has been known best as a defense contractor. On Monday it reported something new: American businesses now bring in more of its revenue than the US government does. US commercial revenue was $984 million in the third quarter, against $953 million from the government. Finance chief David Glazer called it "a critical milestone in the history of our company."

The rest of the report was just as striking. Total revenue rose 96% from a year earlier to $2.313 billion, the first quarter above $2 billion. Chief revenue officer Ryan Taylor called those "the highest growth rates we've ever delivered as a public company." One number didn't keep up. The total value of the contracts Palantir signed rose only 6%.

Palantir's shares fell 1.65% on Tuesday, the first trading day after the results, while the S&P 500 fund rose 0.3%. This story is about that gap: revenue almost doubling while new contracts barely grew, and what the company says explains it.

A company that is now mostly American business

US commercial revenue grew 148% from a year earlier and 29% from the quarter before. US government revenue also grew fast, up 96%. Together the US brought in $1.937 billion, "representing 84% of our total revenue," Taylor said.

The rest of the world is growing far more slowly. International commercial revenue rose 21% to $184 million, and international government revenue rose 31% to $192 million.

Revenue beat the $2.18 billion analysts had expected, MarketBeat reported. Palantir also raised its forecast for the full year to between $8.530 billion and $8.534 billion, from between $8.150 and $8.158 billion three months ago. It expects fourth-quarter revenue of between $2.649 billion and $2.653 billion, and full-year US commercial revenue "in excess of $3.559 billion."

Profit at a new scale

Palantir lost $373.7 million in 2022, its annual reports show, and earned $1.6 billion in all of 2025. This quarter alone, net income was $1.128 billion, a margin of 49%. Glazer noted that it was $144 million two years ago. Income from operations under standard accounting was $1.085 billion, a margin of 47%.

The cash followed. Operations brought in $1.205 billion, and Palantir ended the quarter with $10.4 billion in cash and US Treasury securities. Part of its pay comes in shares rather than cash: stock-based compensation was $319 million in the quarter, a cost that is included in those standard figures but left out of the adjusted ones Palantir also reports.

The number that didn't keep up

Total contract value, or TCV, is the full potential value of the deals signed in a quarter. Palantir closed $2.918 billion, up 6%. In US commercial, where revenue grew 148%, TCV was $1.463 billion, up 11%. Remaining deal value, what is left to collect on US commercial contracts, was $6.517 billion, up 79% from a year earlier but only 4% from the quarter before. 24/7 Wall St. called TCV growth "far slower than headline revenue growth," and TradingKey listed "slower contract value growth relative to revenue" among the risks to watch.

Palantir's answer is that customers are signing shorter deals, not fewer. "We signed multiple 8-figure deals in the quarter that were shorter in duration than usual, as customers rapidly adopted initial Sovereign AI capabilities in their enterprise," Glazer said. He added that "over time, we expect both the duration and size of these contracts to increase." Chief executive Alex Karp described the same pattern from the sales floor: a "shorter duration of the contract, but then an ability to expand that contract dramatically."

The company has other numbers on its side. Over the past year it closed $6.114 billion of US commercial contracts, up 62% from the year before, a longer view that looks better than one quarter. Net dollar retention, which compares what existing customers spend now with what they spent a year ago, was 165%. A shorter contract also counts for less in TCV even if the customer pays the same each year, which is the point Glazer was making.

What Karp is selling

Karp's word for all of this is sovereignty. In Palantir's telling, "Sovereign AI" means a company trains open AI models on its own data, inside Palantir's software, so that what makes the business different stays with the business instead of passing to an AI lab. "The Sovereign AI movement is imposing the most dramatic dichotomy between haves and have nots that I have witnessed in 30 years of business," he said in the release.

The evidence on the call came from Palantir itself. Taylor said a customer, L3Harris, "cut costs by 95% in preliminary results" by training an open model on its own data. We can't check that claim, and customers' results aren't in any filing we have read. Karp's tone was that of someone who has stopped worrying about skeptics. "We don't need the people who aren't convinced," he said on the call, adding that "we really cannot satiate demand" and that "our somewhat crazy aspiration to take the whole market doesn't look that crazy right now."

What it adds up to

This is analysis, not advice. Both things can be true at once. Palantir's revenue and profit growth are in its reported results, under standard accounting. And a business whose contract signings grow far more slowly than its revenue has to show, sooner or later, that the short deals turn into long ones.

The test is simple and public. If Glazer is right, TCV should pick up in the coming quarters as these short contracts are renewed at larger sizes. If it stays near this quarter's pace while revenue keeps climbing, Palantir will be running through its backlog faster than it refills it, and growth at this rate would be hard to sustain.

These figures come from the earnings release and the call. Palantir's 10-Q, with more detail on contracts and customers, had not appeared on the SEC's site when this was written; more figures are on its company page. For a company that started out working with the US government, the biggest US customers are now American businesses. Whether they stay for years is the question this quarter couldn't answer. Updated November 5: added how the shares closed on Tuesday.