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Palantir's shares jump as large contracts boost revenue forecast

Palantir's shares jump as large contracts boost revenue forecast

FILE PHOTO: FILE PHOTO: The logo of U.S. software company Palantir Technologies is seen in Davos, Switzerland January 22, 2020. REUTERS/Arnd Wiegmann/File Photo/File Photo

:Shares of Palantir Technologies Inc jumped about 12per cent after the U.S. data analytics company forecast current-quarter sales above expectations, thanks to large contracts it secured from corporations and government agencies.

The company, which beat Street estimates for second-quarter revenue, said it closed 62 deals worth US$1 million or more, booked over US$900 million in total contract value and added 20 net new customers during the three months.

Co-founded in 2003 by tech billionaire Peter Thiel, Palantir caters to government bodies and other industries, and is known mainly for its work with U.S. government defense and intelligence agencies including the Central Intelligence Agency (CIA) as well as companies such as 3M and Rio Tinto.

Palantir allows customers to integrate their data with its two software platforms to get an analytical view of their operations.

During the second quarter, Palantir won one-year contract renewal worth US$7.4 million from the U.S. Centers for Disease Control and Prevention, and was also contracted by the Federal Aviation Administration (FAA) to provide a data analytics tool.

Lately, the company has been involved in some controversies. Earlier this year, its stock was fueled by investor interest it garnered on Reddit forum WallStreetBets, despite analysts warning about its pricey valuation and raising questions on its heavy reliance on government contracts for business.

On Thursday, Palantir was the second most discussed stock on the trading forum, with most comments reflecting positive sentiment, according to Swaggystocks.com, which tracks comments on Reddit.

Palantir expects its third-quarter revenue to come in at about US$385 million, above estimates of US$376.1 million, according to IBES data from Refinitiv.

Second-quarter revenue surged 49per cent to US$376 million, beating expectations of US$352.3 million.

(Reporting by Chavi Mehta and Akanksha Rana in Bengaluru, Editing by Sherry Jacob-Phillips and Shinjini Ganguli)

Source: Reuters

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