The most opaque business in Silicon Valley has just published its best results. This is exactly what Palantir sells

Palantir has published some quarterly results that have surprised even its most optimistic analysts: revenues of $1.63 billion in the first quarter, 85% more than a year before. The company has also raised its annual forecast to almost 7,660 million. These are numbers that place Palantir in another league. And yet, many people don’t know exactly what they do. That is not an accident when it comes to this company, with such a specific type of activity.

The context. Palantir has been building data analysis software for more than twenty years for governments and institutions that prefer not to make the headlines: the CIA, the FBI, the Pentagon, the United States immigration services…

The company was founded in 2003 by Peter Thiel, the investor who also put money into Facebook and which today orbits in the power constellation. Trumpian, and by Alex Karp, its CEO, a notably eccentric figure with a PhD in Social Theory from Frankfurt.

• The combination of American intelligence money (In-Q-Tel, the CIA’s venture capital fund, was one of its first investors) and German university campus philosophy perfectly defines the moral ambiguity in which the company lives.

In detailand. Palantir’s business has two legs. The first, and the one that is growing the most, is the American government: 687 million dollars in this quarter alone, 84% more than the previous year. The second leg is the commercial business with private companies, which has grown even faster (133%) to 595 million. But to understand how Palantir makes money you have to understand what it sells:

• Palantir Gotham It is its star product for governments and defense. It integrates dispersed data sources (satellite images, interceptions, movement logs, social networks, intelligence databases, etc.) and turns them into a coherent map that an analyst can interrogate. That is, it transforms oceans of noise into manageable information environments on which to make decisions. The screenshot that heads this article is an example.
• Palantir Foundry It is the business version. It does the same thing but for large companies: it unites data from different departments, cleans the information and allows automated workflows to be built on it.
• Maven AI It is their most recent and most controversial product. It is a command and control system that analyzes battlefield data and identifies targets in real time. The Pentagon is in the process of making it an official program of the American army, which would guarantee succulent long-term contracts.

Between the lines. CEO Alex Karp This week he addressed his shareholders to explain to them that “the United States remains the constant core of the business. And that business is exploding.” Palantir’s rise is directly linked to increased defense spending, escalating geopolitical conflicts, and the growing use of AI in military contexts.

In other words: when the world becomes more dangerous, Palantir makes more. Its business model is, to some extent, a barometer of global tension.

Yes, but. Palantir Stock fell 1.5% in the aftermarket despite the good results, and they have accumulated a drop of around 18% so far this year. Investors have two questions without clear answers.

1. The first: is 85% growth sustainable?
2. The second, the most uncomfortable: what happens if the administration changes, if defense priorities change or if Congress tightens spending?

A company whose main engine is a single client (the US government) has a concentration of risk that does not appear in the metrics they boast about.

The money trail. The perennial debate about Palantir is not the financial one but the ethical one. The company has been at the center of some controversies for its work with ICE (the American immigration service) in identifying undocumented people, and for the role that its tools have played in military operations in different parts of the world.

Karp does not shy away from these questions: he openly argues that the West needs companies willing to do this work, and that those who refuse simply leave the field open to others. It is an argument that its investors accept without many questions. And the results, for now, prove them right.

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Featured image | Palantir, Xataka with Mockuuups Studio