Palantir Technologies Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) 3 Table of Contents Palantir Technologies Inc. Condensed Consolidated Balance Sheets (in thousands, except per share amounts) (unaudited) As of September 30, As of December 31, 2021 2020 Assets Current assets: Cash and cash equivalents $ 2,335,068 $ 2,011,323 Restricted cash 41,316 37,285 Accounts receivable 174,405 156,932 Marketable securities 148,077 — Prepaid expenses and other current assets 112,624 51,889 Total current assets 2,811,490 2,257,429 Property and equipment, net 28,778 29,541 Restricted cash, noncurrent 46,791 79,538 Operating lease right-of-use assets 220,846 217,075 Other assets 116,422 106,921 Total assets $ 3,224,327 $ 2,690,504 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 17,654 $ 16,358 Accrued liabilities 179,467 158,546 Deferred revenue (1) 208,100 189,520 Customer deposits 232,707 210,320 Operating lease liabilities 43,581 29,079 Total current liabilities 681,509 603,823 Deferred revenue, noncurrent (1) 26,723 50,525 Customer deposits, noncurrent 42,734 81,513 Debt, noncurrent, net — 197,977 Operating lease liabilities, noncurrent 219,646 229,800 Other noncurrent liabilities 5,659 4,316 Total liabilities 976,271 1,167,954 Commitments and Contingencies (Note 8) Stockholders’ equity: Preferred stock, par value $ 0.001 : 2,000,000 shares authorized and 0 issued and outstanding as of September 30, 2021 and December 31, 2020 — — Common stock, $ 0.001 par value: 20,000,000 Class A shares authorized as of September 30, 2021 and December 31, 2020; 1,900,441 shares issued and outstanding as of September 30, 2021, and 1,542,058 shares issued and outstanding as of December 31, 2020; 2,700,000 Class B shares authorized as of September 30, 2021 and December 31, 2020; 89,672 shares issued and outstanding as of September 30, 2021, and 249,077 shares issued and outstanding as of December 31, 2020; and 1,005 Class F shares authorized, issued, and outstanding as of September 30, 2021 and December 31, 2020 1,991 1,792 Additional paid-in capital 7,577,305 6,488,857 Accumulated other comprehensive loss ( 1,695 ) ( 2,745 ) Accumulated deficit ( 5,329,545 ) ( 4,965,354 ) Total stockholders’ equity 2,248,056 1,522,550 Total liabilities and stockholders’ equity $ 3,224,327 $ 2,690,504 (1) Deferred revenue as of September 30, 2021 and December 31, 2020 includes $ 38.6 million and $ 68.2 million, respectively, from Palantir Technologies Japan, K.K. See Note 6. Equity Method Investments for more information. The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents Palantir Technologies Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenue $ 392,146 $ 289,366 $ 1,109,022 $ 770,582 Cost of revenue 86,804 149,340 251,841 282,044 Gross profit 305,342 140,026 857,181 488,538 Operating expenses: Sales and marketing 153,443 334,911 451,919 536,082 Research and development 94,316 313,915 303,311 466,530 General and administrative 149,524 338,977 454,054 503,033 Total operating expenses 397,283 987,803 1,209,284 1,505,645 Loss from operations ( 91,941 ) ( 847,777 ) ( 352,103 ) ( 1,017,107 ) Interest income 379 494 1,127 4,312 Interest expense ( 609 ) ( 2,085 ) ( 3,039 ) ( 12,325 ) Change in fair value of warrants — ( 9,201 ) — 811 Other income (expense), net ( 8,528 ) ( 3,293 ) ( 11,297 ) 1,218 Loss before provision (benefit) for income taxes ( 100,699 ) ( 861,862 ) ( 365,312 ) ( 1,023,091 ) Provision (benefit) for income taxes 1,438 ( 8,543 ) ( 1,121 ) ( 5,043 ) Net loss $ ( 102,137 ) $ ( 853,319 ) $ ( 364,191 ) $ ( 1,018,048 ) Net loss per share attributable to common stockholders, basic $ ( 0.05 ) $ ( 0.94 ) $ ( 0.19 ) $ ( 1.43 ) Net loss per share attributable to common stockholders, diluted $ ( 0.05 ) $ ( 0.94 ) $ ( 0.19 ) $ ( 1.43 ) Weighted-average shares of common stock outstanding used in computing net loss per share attributable to common stockholders, basic 1,964,395 905,462 1,893,911 713,879 Weighted-average shares of common stock outstanding used in computing net loss per share attributable to common stockholders, diluted 1,964,395 905,462 1,893,911 716,027 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Table of Contents Palantir Technologies Inc. Condensed Consolidated Statements of Comprehensive Loss (in thousands) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net loss $ ( 102,137 ) $ ( 853,319 ) $ ( 364,191 ) $ ( 1,018,048 ) Other comprehensive income (loss): Foreign currency translation adjustments ( 1,760 ) 268 1,050 1,871 Comprehensive loss $ ( 103,897 ) $ ( 853,051 ) $ ( 363,141 ) $ ( 1,016,177 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 6 Table of Contents Palantir Technologies Inc. Condensed Consolidated Statements of Redeemable Convertible and Convertible Preferred Stock and Stockholders’ Equity (Deficit) (in thousands) (unaudited) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance as of June 30, 2021 1,936,578 $ 1,937 $ 7,294,369 $ 65 $ ( 5,227,408 ) $ 2,068,963 Issuance of common stock from the exercise of stock options 41,249 41 97,954 — — 97,995 Issuance of common stock upon vesting of restricted stock units (“RSUs”) 13,291 13 ( 13 ) — — — Stock-based compensation — — 184,995 — — 184,995 Other comprehensive loss — — — ( 1,760 ) — ( 1,760 ) Net loss — — — — ( 102,137 ) ( 102,137 ) Balance as of September 30, 2021 1,991,118 $ 1,991 $ 7,577,305 $ ( 1,695 ) $ ( 5,329,545 ) $ 2,248,056 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance as of December 31, 2020 1,792,140 $ 1,792 $ 6,488,857 $ ( 2,745 ) $ ( 4,965,354 ) $ 1,522,550 Issuance of common stock from the exercise of stock options 155,720 155 474,528 — — 474,683 Issuance of common stock upon vesting of RSUs 37,123 37 ( 37 ) — — — Issuance of common stock upon vesting of growth units 1,471 1 ( 1 ) — — — Issuance of common stock upon net exercise of common stock warrants and other 4,664 6 1,706 — — 1,712 Stock-based compensation — — 612,252 — — 612,252 Other comprehensive income — — — 1,050 — 1,050 Net loss — — — — ( 364,191 ) ( 364,191 ) Balance as of September 30, 2021 1,991,118 $ 1,991 $ 7,577,305 $ ( 1,695 ) $ ( 5,329,545 ) $ 2,248,056 7 Table of Contents Palantir Technologies Inc. Condensed Consolidated Statements of Redeemable Convertible and Convertible Preferred Stock and Stockholders’ Equity (Deficit) (in thousands) (unaudited) Redeemable Convertible Preferred Stock Convertible Preferred Stock Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income Accumulated Deficit Total Stockholders’ Equity (Deficit) Shares Amount Shares Amount Shares Amount Balance as of June 30, 2020 4,017 $ 33,569 742,933 $ 2,094,509 736,635 $ 737 $ 2,563,354 $ 900 $ ( 3,963,692 ) $ ( 1,398,701 ) Issuance of Series D preferred stock upon net exercise of Series D preferred stock warrants — — 2,380 10,810 — — — — — — Issuance of common stock upon net exercise of common stock warrants — — — — 7,631 8 ( 8 ) — — — Issuance of common stock, net of issuance costs — — — — 88,280 88 404,591 — — 404,679 Conversion of redeemable convertible preferred stock to common stock ( 4,017 ) ( 33,569 ) — — 4,017 4 33,565 — — 33,569 Conversion of convertible preferred stock to common stock — — ( 745,313 ) ( 2,105,319 ) 793,726 794 2,104,525 — — 2,105,319 Conversion of preferred stock warrants to common stock warrants — — — — — — 31,007 — — 31,007 Issuance of common stock from the exercise of stock options — — — — 31,748 32 87,175 — — 87,207 Issuance of common stock upon vesting of restricted stock units — — — — 68,149 68 ( 68 ) — — — Stock-based compensation — — — — — — 841,929 — — 841,929 Settlement of employee loan accounted for as a modification to stock option — — — — ( 3,500 ) ( 4 ) ( 201 ) — — ( 205 ) Other comprehensive income — — — — — — — 268 — 268 Net loss — — — — — — — — ( 853,319 ) ( 853,319 ) Balance as of September 30, 2020 — $ — — $ — 1,726,686 $ 1,727 $ 6,065,869 $ 1,168 $ ( 4,817,011 ) $ 1,251,753 8 Table of Contents Palantir Technologies Inc. Condensed Consolidated Statements of Redeemable Convertible and Convertible Preferred Stock and Stockholders’ Equity (Deficit) (in thousands) (unaudited) Redeemable Convertible Preferred Stock Convertible Preferred Stock Common Stock Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity (Deficit) Shares Amount Shares Amount Shares Amount Shares Amount Balance as of December 31, 2019 4,017 $ 33,569 742,840 $ 2,093,662 581,497 $ 588 $ 1,857,331 6,393 $ ( 38,895 ) $ ( 703 ) $ ( 3,798,963 ) $ ( 1,980,642 ) Conversion of Series H-1 convertible preferred stock to common stock — — ( 28 ) ( 100 ) 28 — 100 — — — — 100 Issuance of Series K convertible preferred stock — — 121 947 — — — — — — — — Issuance of Series D preferred stock upon net exercise of Series D preferred stock warrants — — 2,380 10,810 — — — — — — — — Repurchase of common stock, held in treasury — — — — ( 808 ) — — 808 ( 3,777 ) — — ( 3,777 ) Retirement of treasury stock — — — — — ( 7 ) ( 42,665 ) ( 7,201 ) 42,672 — — — Issuance of common stock upon net exercise of common stock warrants — — — — 7,631 8 ( 8 ) — — — — — Issuance of common stock, net of issuance costs — — — — 206,501 207 942,322 — — — — 942,529 Conversion of redeemable convertible preferred stock to common stock ( 4,017 ) ( 33,569 ) — — 4,017 4 33,565 — — — — 33,569 Conversion of convertible preferred stock to common stock — — ( 745,313 ) ( 2,105,319 ) 793,726 794 2,104,525 — — — — 2,105,319 Conversion of preferred stock warrants to common stock warrants — — — — — — 31,007 — — — — 31,007 Issuance of common stock from the exercise of stock options — — — — 69,444 69 115,961 — — — — 116,030 Issuance of common stock upon vesting of RSUs — — — — 68,150 68 ( 68 ) — — — — — Stock-based compensation — — — — — — 1,024,000 — — — — 1,024,000 Settlement of employee loan accounted for as a modification to stock option — — — — ( 3,500 ) ( 4 ) ( 201 ) — — — — ( 205 ) Other comprehensive income — — — — — — — — — 1,871 — 1,871 Net loss — — — — — — — — — — ( 1,018,048 ) ( 1,018,048 ) Balance as of September 30, 2020 — $ — — $ — 1,726,686 $ 1,727 $ 6,065,869 — $ — $ 1,168 $ ( 4,817,011 ) $ 1,251,753 The accompanying notes are an integral part of these condensed consolidated financial statements. 9 Table of Contents Palantir Technologies Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Nine Months Ended September 30, 2021 2020 Operating activities Net loss $ ( 364,191 ) $ ( 1,018,048 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 11,057 10,308 Stock-based compensation 611,308 1,028,914 Non-cash operating lease expense 23,417 28,815 Unrealized loss from marketable securities 7,238 — Other operating activities 3,076 3,621 Changes in operating assets and liabilities: Accounts receivable ( 15,412 ) ( 112,723 ) Prepaid expenses and other current assets ( 7,872 ) ( 11,598 ) Other assets ( 8,155 ) ( 20,944 ) Accounts payable 1,158 ( 29,372 ) Accrued liabilities 20,360 42,138 Deferred revenue, current and noncurrent ( 3,781 ) ( 30,937 ) Customer deposits, current and noncurrent ( 16,227 ) ( 140,162 ) Operating lease liabilities, current and noncurrent ( 22,786 ) ( 34,725 ) Other noncurrent liabilities 1,234 6,393 Net cash provided by (used in) operating activities 240,424 ( 278,320 ) Investing activities Purchases of property and equipment ( 6,783 ) ( 7,475 ) Purchases of marketable securities ( 155,315 ) — Purchases of alternative investments ( 50,941 ) — Other investing activities ( 3,000 ) ( 2,500 ) Net cash used in investing activities ( 216,039 ) ( 9,975 ) Financing activities Proceeds from the issuance of common stock, net of issuance costs — 942,529 Proceeds from issuance of debt, net of issuance costs — 199,369 Principal payments on borrowings ( 200,000 ) ( 400,000 ) Proceeds from the exercise of common stock options 474,683 79,473 Repurchase of common stock — ( 3,777 ) Other financing activities ( 401 ) ( 250 ) Net cash provided by financing activities 274,282 817,344 Effect of foreign exchange on cash, cash equivalents, and restricted cash ( 3,638 ) ( 678 ) Net increase in cash, cash equivalents, and restricted cash 295,029 528,371 Cash, cash equivalents, and restricted cash - beginning of period 2,128,146 1,401,962 Cash, cash equivalents, and restricted cash - end of period $ 2,423,175 $ 1,930,333 Supplemental disclosures of cash flow information: Cash paid for income taxes $ 3,588 $ 9,143 Cash paid for interest 2,774 9,737 Supplemental disclosures of non-cash investing and financing information: Conversion of redeemable convertible and convertible preferred stock to common stock $ — $ 2,138,988 Receivable from the exercise of common stock options included in prepaid expenses and other current assets 396 36,557 Conversion of convertible preferred stock warrants to common stock warrants — 31,007 Cashless net exercise of warrants for convertible preferred stock — 10,810 The accompanying notes are an integral part of these condensed consolidated financial statements. 10 Table of Contents Palantir Technologies Inc. Notes to Unaudited Condensed Consolidated Financial Statements 1. Organization Palantir Technologies Inc. (including its subsidiaries, “Palantir,” or “the Company”) was incorporated in Delaware on May 6, 2003. The Company builds and deploys software platforms, Palantir Gotham and Palantir Foundry, that serve as the central operating systems for its customers. 2. Significant Accounting Policies Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The accompanying condensed consolidated financial statements include the accounts of Palantir Technologies Inc. and its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Investments in entities where the Company holds at least a 20 % ownership interest and has the ability to exercise significant influence over the investee, but does not control, are accounted for using the equity method of accounting. The Company’s fiscal year ends on December 31. The unaudited condensed consolidated balance sheet as of December 31, 2020, included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including certain notes required by GAAP on an annual reporting basis. In management’s opinion, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the balance sheets and statements of operations, comprehensive loss, stockholders’ equity (deficit), and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year or any future period. The Company ceased to be an emerging growth company as of December 31, 2020, which accelerated its adoption of Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) . As a result, certain components of cash flows used in operating activities within the Company’s condensed consolidated statements of cash flows for the nine months ended September 30, 2020, have been presented to conform to the new standard. The impact to the presentation of the other statements was not material. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes included in its Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on February 26, 2021. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions made in the accompanying condensed consolidated financial statements include, but are not limited to, identification of performance obligations in customer contracts ; the valuation of deferred tax assets and uncertain tax positions ; collectability of contract consideration, including accounts receivable ; useful lives of tangible assets ; and the incremental borrowing rate for operating leases. Estimates and judgments are based on historical experience, forecasted events, and various other assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could affect the Company’s financial position and results of operations. 11 Table of Contents Palantir Technologies Inc. Notes to Unaudited Condensed Consolidated Financial Statements Summary of Significant Accounting Policies The Company’s significant accounting policies are discussed in Note 2. Significant Accounting Policies in the notes to consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on February 26, 2021. There have been no significant changes to these policies during the nine months ended September 30, 2021. Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents primarily consist of amounts invested in money market funds. Restricted cash primarily consists of cash and certificates of deposit that are held as collateral against letters of credit and guarantees that the Company is required to maintain for operating lease agreements, certain customer contracts, and other guarantees and financing arrangements. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the amounts shown in the condensed consolidated statements of cash flows (in thousands): As of September 30, 2021 2020 Cash and cash equivalents $ 2,335,068 $ 1,800,190 Restricted cash 41,316 43,800 Restricted cash, noncurrent 46,791 86,343 Total cash, cash equivalents, and restricted cash $ 2,423,175 $ 1,930,333 Accounts Receivable and Allowance for Credit Losses Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses, if any. The Company generally grants non-collateralized credit terms to its customers. Allowance for credit losses is based on the Company’s best estimate of probable losses inherent in its accounts receivable portfolio and is determined based on expectations of the customer’s ability to pay by considering factors such as customer type (commercial or government), historical experience, financial position of the customer, age of the accounts receivable, current economic conditions, including the ongoing COVID-19 pandemic, and reasonable and supportable forward-looking factors about its portfolio and future economic conditions. Accounts receivable are written-off and charged against an allowance for credit losses when the Company has exhausted collection efforts without success. Based upon the assessment as of September 30, 2021, the Company recorded an immaterial allowance for credit losses. As of December 31, 2020, the Company did no t record an allowance for credit losses. Concentrations of Credit Risk and Other Concentrations Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, and accounts receivable. Cash equivalents primarily consist of money market funds with original maturities of three months or less, which are invested primarily with U.S. financial institutions. Cash deposits with financial institutions, including restricted cash, generally exceed federally insured limits. Management believes minimal credit risk exists with respect to these financial institutions and the Company has not experienced any losses on such amounts. The Company is exposed to concentrations of credit risk with respect to accounts receivable presented on the condensed consolidated balance sheets. The Company’s accounts receivable balances as of September 30, 2021 and December 31, 2020 were $ 174.4 million and $ 156.9 million, respectively. Customer H represented 11 % of total accounts receivable as of September 30, 2021. Customer G represented 13 % of total accounts receivable as of December 31, 2020. No other customer represented more than 10 % of total accounts receivable as of September 30, 2021 and December 31, 2020. The Company seeks to mitigate its credit risk with respect to accounts receivable by contracting with large commercial customers and government agencies and regularly monitoring the aging of accounts receivable balances. As of September 30, 2021 and December 31, 2020, the Company had not experienced any significant losses on its accounts receivable. For the three and nine months ended September 30, 2021, no customer represented more than 10 % of total revenue. For the three months ended September 30, 2020, no customer represented more than 10 % of total revenue. For the nine months ended September 30, 2020, Customer F, which is in the government operating segment, represented 11 % of total revenue. No other customer represented more than 10 % of total revenue for the three and nine months ended September 30, 2020. 12 Table of Contents Palantir Technologies Inc. Notes to Unaudited Condensed Consolidated Financial Statements The Company relies on the technology, infrastructure, and software applications, including software-as-a-service offerings, of third parties in order to host or operate certain key products and functions of its business. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740), as part of its simplification initiative to reduce the cost and complexity in accounting for income taxes. ASU 2019-12 removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also amends other aspects of the guidance to help simplify and promote consistent application of GAAP. The Company adopted ASU 2019-12 as of January 1, 2021 using transition methods allowed under each aspect of the guidance. The adoption of the standard did not have a material impact on the Company’s condensed consolidated financial statements. 3. Contract Liabilities and Remaining Performance Obligations Contract Liabilities The Company’s contract liabilities consist of deferred revenue and customer deposits. As of September 30, 2021 and December 31, 2020, the Company’s contract liability balances were $ 510.3 million and $ 531.9 million, respectively. Revenue of $ 347.7 million and $ 406.4 million was recognized during the nine months ended September 30, 2021 and 2020, respectively, that was included in the contract liability balances as of December 31, 2020 and 2019, respectively. Remaining Performance Obligations The Company’s arrangements with its customers often have terms that span over multiple years. However, the Company generally allows its customers to terminate contracts for convenience prior to the end of the stated term with less than twelve months’ notice. Revenue allocated to remaining performance obligations represents noncancelable contracted revenue that has not yet been recognized, which includes deferred revenue and, in certain instances, amounts that will be invoiced. The Company has elected the practical expedient allowing the Company to not disclose remaining performance obligations for contracts with original terms of twelve months or less. Cancelable contracted revenue, which includes customer deposits, is not considered a remaining performance obligation. The Company’s remaining performance obligations were $ 873.9 million as of September 30, 2021, of which the Company expects to recognize approximately 45 % as revenue over the next twelve months. Disaggregation of Revenue See Note 13. Segment and Geographic Information for disaggregated revenue by customer segment and geographic region. 13 Table of Contents Palantir Technologies Inc. Notes to Unaudited Condensed Consolidated Financial Statements 4. Investments and Fair Value Measurements Financial instruments consist of money market funds and certificates of deposit included in cash equivalents and restricted cash, accounts receivable, equity securities, other assets accounted for at fair value, accounts payable, and accrued liabilities. Money market funds, certificates of deposit, and marketable securities are stated at fair value on a recurring basis. Accounts receivable, accounts payable, and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date. The following tables present the Company’s assets that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation (in thousands): As of September 30, 2021 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 767,372 $ 767,372 $ — $ — Certificates of deposit 60,061 — 60,061 — Marketable securities 148,077 148,077 — — Total $ 975,510 $ 915,449 $ 60,061 $ — As of December 31, 2020 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 1,075,783 $ 1,075,783 $ — $ — Certificates of deposit 74,097 — 74,097 — Total $ 1,149,880 $ 1,075,783 $ 74,097 $ — Certificates of Deposit The Company’s Level 2 instruments consist of cash equivalents and restricted cash invested in certificates of deposit. The fair value of such instruments is estimated based on valuations obtained from third-party pricing services that utilize industry standard valuation models, including both income-based and market-based approaches, for which all significant inputs are observable either directly or indirectly. These inputs include interest rate curves, foreign exchange rates, and credit ratings. Gross unrealized gains or losses on certificate of deposits as of September 30, 2021 and December 31, 2020 were not material. Marketable Securities Marketable securities consist of equity securities in publicly-traded companies and are recorded at fair market value each reporting period. Realized and unrealized gains and losses are recorded in other income (expense), net on the condensed consolidated statements of operations. During the three and nine months ended September 30, 2021, the Company recorded net unrealized losses of $ 7.2 million within other income (expense), net on the condensed consolidated statements of operations. Investments The Company approved and entered into certain agreements (“Investment Agreements”) to purchase, or commit to purchase, as further discussed in Note 8. Commitments and Contingencies—Investment Commitments, shares of various entities, including special purpose acquisition companies and/or other privately-held or publicly-traded entities (each, an “Investee,” and such purchases, and commitments to purchase, the “Investments”). In connection with signing the Investment Agreements, each Investee or an associated entity and the Company entered into a commercial contract for access to the Company’s products and services. The maximum potential revenue from all of these commercial contracts is $ 640.2 million, which is inclusive of $ 82.9 million of contractual options. The terms of such contracts, including such contractual options, range from three to ten years . The majority of these commercial contracts are subject to various termination provisions, including for convenience in the event a proposed business combination is not completed. 14 Table of Contents Palantir Technologies Inc. Notes to Unaudited Condensed Consolidated Financial Statements During 2021, the Company assessed the concurrent agreements under the non-monetary guidance within Accounting Standards Codification (“ASC”) 606 - Revenue from Contracts with Customers and the total revenue recognized from the commercial contracts during the three and nine months ended September 30, 2021 was $ 19.0 million and $ 22.0 million, respectively. The following table presents the details of the investments purchased under such Investment Agreements during the nine months ended September 30, 2021 (in thousands): Entity (1) Share Amount Investment Amount Celularity 2,000 $ 20,000 Faraday Future 2,500 25,000 Astrocast 1,520 5,000 BlackSky 800 8,000 Lilium 4,100 41,000 Roivant Sciences 3,000 30,000 Sarcos Robotics 2,100 21,000 Autonomous aerial vehicle company (2) 3,000 3,000 Total 19,020 $ 153,000 (1) Investments are in publicly-traded marketable securities, unless otherwise noted. (2) Investment in privately-held company. Privately-Held Securities Equity investments in private-held companies without readily determinable fair values are recorded using the measurement alternative of cost less impairment, if any, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. As of September 30, 2021, the carrying value of investments without readily determinable fair values were recorded in other assets in the Company’s condensed consolidated balance sheets and were not material. Alternative Investments The Company purchased $ 50.9 million in 100 -ounce gold bars, which are included within prepaid expenses and other current assets on the condensed consolidated balance sheet. The investment is initially recorded as cost and is subsequently remeasured at lower of cost or market each reporting period. The gold bars will initially be kept in a secure third-party facility located in the northeastern United States. The Company is able to take physical possession of the gold bars stored at the facility at any time with reasonable notice. 5. Balance Sheet Components Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): As of September 30, 2021 As of December 31, 2020 Leasehold improvements $ 80,215 $ 85,196 Computer equipment, software, and other 25,451 22,275 Furniture and fixtures 10,021 9,976 Construction in progress 5,305 493 Total property and equipment, gross 120,992 117,940 Less: accumulated depreciation and amortization ( 92,214 ) ( 88,399 ) Total property and equipment, net $ 28,778 $ 29,541 Depreciation and amortization expense related to property and equipment, net was $ 3.1 million and $ 2.5 million for the three months ended September 30, 2021 and 2020, respectively, and $ 9.3 million and $ 9.3 million for the nine months ended September 30, 2021 and 2020, respectively. 15 Table of Contents Palantir Technologies Inc. Notes to Unaudited Condensed Consolidated Financial Statements Accrued Liabilities Accrued liabilities consisted of the following (in thousands): As of September 30, 2021 As of December 31, 2020 Accrued payroll and related expenses $ 100,157 $ 85,466 Accrued other liabilities 79,310 73,080 Total accrued liabilities $ 179,467 $ 158,546 6. Equity Method Investments Palantir Technologies Japan, K.K. During November 2019, the Company and SOMPO Holdings, Inc. (“SOMPO”) created a Japanese Kabushiki Kaisha (“K.K.”), Palantir Technologies Japan, K.K. (“Palantir Japan”), to distribute Palantir platforms to the Japanese market. Upon closing of the transaction with SOMPO, the Company purchased a total of 100,000 shares of Palantir Japan common stock for $ 25.0 million. The shares the Company received in exchange represent a 50 % voting interest in Palantir Japan. The remaining 50 % of the voting interest is held by SOMPO. The Company’s investment in Palantir Japan is accounted for as an equity method investment as the Company is able to exercise significant influence over, but does not control, the investee. 7. Debt 2014 Credit Facility In October 2014, the Company entered into an unsecured revolving credit facility which has been subsequently amended (the “2014 Credit Facility”). The 2014 Credit Facility incurred interest at the London Interbank Offered Rate (“LIBOR”) plus a margin of 2.75 % per annum, subject to certain adjustments, and incurs a commitment fee of 0.375 % assessed on the daily average undrawn portion of revolving commitments. Interest and commitment fees are payable at the end of an interest period or at each three-month interval if the interest period is longer than three months. The 2014 Credit Facility, as amended, matures on June 4, 2023 . During April 2021, the Company entered into an amendment to the 2014 Credit Facility, which provided for an increase of $ 200.0 million to the revolving commitments of the existing lenders under the 2014 Credit Facility, for total revolving commitments of $ 400.0 million, and which also provided for an incremental loan facility for additional loans in an aggregate principal amount of up to $ 100.0 million with one or more existing or new lenders upon mutual agreement between the Company and such lenders. Upon entering into the amendment, the Company repaid its outstanding term loans of $ 200.0 million. As of September 30, 2021, the Company had no amounts outstanding under the 2014 Credit Facility and a $ 400.0 million undrawn revolving credit facility. The 2014 Credit Facility contains customary r epresentat ions and warranties, and certain financial and nonfinancial covenants, including but not limited to maintaining minimum liquidity of $ 50.0 million, and certain limitations on liens and indebtedness. The Company was in compliance with all covenants associated with the 2014 Credit Facility as of September 30, 2021. 8. Commitments and Contingencies Purchase Commitments In December 2019, the Company entered into, and subsequently amended during December 2020, a minimum annual commitment to purchase cloud hosting services of at least $ 1.49 billion over six contract years, with an optional carryover period through June 30, 2029, in exchange for various discounts on such services. I f the spend does not meet the minimum annual commitment each year or at the end of the term, the Company is obligated to make a return payment. If the difference is greater than $30.0 million for each of the first three contract years or $50.0 million for each of the contract years thereafter (“relief amounts”), the Company has the option to pay the respective relief amount for that year for services to be utilized in the future and the excess amount of the difference above the relief amount would be added to the minimum annual commitment of the following year through the end of the contract. As of September 30, 2021, the Company had satisfied $ 34.0 million of its $ 167.0 million commitment for the contract year ending June 30, 2022. 16 Table of Contents Palantir Technologies Inc. Notes to Unaudited Condensed Consolidated Financial Statements In June 2020, the Company entered into an additional commitment to purchase at least $ 45.0 million of cloud hosting services over a period of five years commencing on June 1, 2020 and ending on May 31, 2025. If the spend commitment is not met at the end of the term, the Company is obligated to pay the full amount of the outstanding balance (“shortfall payment”). The shortfall payment may be applied as a prepayment against consumption during an additional twelve-month coverage period expiring on May 31, 2026, at which time any unused amount would be forfeited. As of September 30, 2021, the Company had satisfied $ 8.0 million of its commitment. Investment Commitments The Company approved and entered into certain Investment Agreements with Investees, as further discussed in Note 4. Investments and Fair Value Measurements - Investments . As of September 30, 2021, the Company had outstanding investment commitments, subject to the applicable terms and conditions, to purchase a total of 22.7 million shares for an aggregate purchase price of $ 226.5 million. The closings of certain of such Investments are contingent upon the completion of a proposed business combination between the applicable Investee and other applicable parties. The following table presents details related to the Company’s investment commitments outstanding as of September 30, 2021 (in thousands): Entity Investment Agreement Date Committed Share Amount Committed Investment Amount Mobility company (1) May 11, 2021 2,000 $ 20,000 Wejo May 28, 2021 3,500 35,000 Babylon Health (1) (2) June 3, 2021 3,500 35,000 Boxed ( 2 ) June 13, 2021 2,000 20,000 Pear Therapeutics June 21, 2021 1,000 10,000 Autonomous vehicle company ( 2 ) June 22, 2021 1,800 18,000 Fast Radius ( 2 ) July 18, 2021 2,000 20,000 Tritium ( 2 ) July 27, 2021 1,500 15,000 AdTheorent ( 2 ) July 27, 2021 1,500 15,000 FinAccel August 2, 2021 1,000 10,000 Energy Vault ( 2 ) September 8, 2021 850 8,500 Electric vehicle charging company ( 2 ) September 10, 2021 2,000 20,000 Total 22,650 $ 226,500 (1) The Company’s investment closed after September 30, 2021. See further discussion in Note 14. Subsequent Events . (2) Commercial contract contains termination for convenience clauses in the event the proposed business combination and/or the Company’s proposed investment is not completed. Litigation and Legal Proceedings From time to time, third parties may assert patent infringement claims against the Company. In addition, from time to time, the Company may be subject to other legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of trademarks, copyrights, and other intellectual property rights; employment claims; securities claims; investor claims; corporate claims; class action claims; and general contract, tort, or other claims. The Company may from time to time also be subject to various legal or government claims, disputes, or investigations. Such matters may include, but not be limited to, claims, disputes, allegations, or investigations related to warranty; refund; breach of contract; breach, leak, or misuse of personal data or confidential information; employment; government procurement; intellectual property; government regulation or compliance (including but not limited to anti-corruption requirements, export or other trade controls, data privacy or data protection, cybersecurity requirements, or antitrust/competition law requirements); securities; investor; corporate; or other matters. The Company is unable to predict whether or when any such matters may arise, the outcome of these matters, or the ultimate legal and financial liability, and cannot reasonably estimate the possible loss or range of loss at this time and accordingly has not accrued a related liability. 17 Table of Contents Palantir Technologies Inc. Notes to Unaudited Condensed Consolidated Financial Statements On December 14, 2017, members of KT4 Partners LLC (Managing Member Marc Abramowitz) and Sandra Martin Clark, as trustee for the Marc Abramowitz Irrevocable Trust Number 7 (together, “KT4 Plaintiffs”), filed an action in the Delaware Superior Court against the Company and Disruptive Technology Advisers LLC. The complaint alleges tortious interference with prospective economic advantage and civil conspiracy in connection with a potential sale of stock by the KT4 Plaintiffs to a third party. The KT4 Plaintiffs seek compensatory and punitive damages, interest, fees, and costs. The Company believes this lawsuit is without merit and is vigorously defending itself against it. Given the uncertainty of litigation, it may be reasonably possible that the Company will incur a loss with regards to the matter; however, it cannot currently estimate a range of possible losses. Accordingly, the Company is unable, at this time, to estimate the overall effects that may result from the lawsuit on its financial condition, results of operations, or cash flows. As of September 30, 2021, the Company was not aware of any currently pending legal matters or claims, individually or in the aggregate, that were expected to have a material adverse impact on its condensed consolidated financial statements. Letters of Credit and Guarantees The Company had irrevocable standby letters of credit and guarantees, including bank guarantees, outstanding in the amounts of $ 88.1 million and $ 116.8 million as of September 30, 2021 and December 31, 2020, respectively, all of which were fully collateralized. The Company is required to maintain these letters of credit and guarantees primarily for operating lease agreements, certain customer contracts, and other guarantees and financing arrangements. As of September 30, 2021, these letters of credit and guarantees had expiration dates through August 2028. Warranties and Indemnification The Company generally provides a warranty for its software products and services and a service level agreement (“SLA”) for the Company’s performance of software operations via its operations and maintenance (“O&M”) services to its customers. The Company’s products are generally warranted to perform substantially as described in the associated product documentation during the subscription term or for a period of up to 90 days where the software is hosted by the customer; and the Company includes O&M services as part of its subscription and license agreements to support this warranty and maintain the operability of the software. The Company’s services are generally warranted to be performed in a professional manner and by an adequate staff with knowledge about the products. In the event there is a failure of such warranties, the Company generally is obligated to correct the product or service to conform to the warranty provision, as set forth in the applicable SLA, or, if the Company is unable to do so, the customer is entitled to seek a refund of the purchase price of the product and service (generally prorated over the contract term). Due to the absence of historical warranty claims, the Company’s expectations of future claims related to products under warranty continue to be insignificant. The Company has not recorded warranty expense or related accruals as of September 30, 2021 and December 31, 2020. The Company generally agrees to indemnify its customers against legal claims that the Company’s software products infringe certain third-party intellectual property rights and accounts for its indemnification obligations. In the event of such a claim, the Company is generally obligated to defend its customer against the claim and to either settle the claim at the Company’s expense or pay damages that the customer is legally required to pay to the third-party claimant. In addition, in the event of an infringement, the Company generally agrees to secure the right for the customer to continue using the infringing product; to modify or replace the infringing product; or, if those options are not commercially practicable, to refund the cost of the software, as prorated over the period. To date, the Company has not been required to make any payment resulting from infringement claims asserted against its customers and does not believe that the Company will be liable for such claims in the foreseeable future. As such, the Company has not recorded a liability for infringement costs as of September 30, 2021 and December 31, 2020. The Company has obligations under certain circumstances to indemnify each of the defendant directors and certain officers against judgments, fines, settlements, and expenses related to claims against such directors and certain officers and otherwise to the fullest extent permitted under the law and the Company’s bylaws and Amended and Restated Certificate of Incorporation. 9. Stockholders’ Equity The Company’s Class A, Class B, and Class F common stock (collectively, the “common stock”) all have the same rights, except with respect to voting and conversion rights. Class A and Class B common stock have voting rights of 1 and 10 votes per share, respectively. The Class F common stock has the voting rights generally described below and each share of Class F common stock is convertible at any time, at the option of the holder thereof, into one share of Class B common stock. All shares of Class F common stock are held in a voting trust established by Stephen Cohen, Alexander Karp, and Peter Thiel (the “Founders”). The Class F common stock generally gives the Founders the ability to control up to 49.999999 % of the total voting power of the Company’s capital stock, so long as the Founders and certain of their affiliates collectively meet a minimum ownership threshold, which was 100 million of the Company’s equity securities as of September 30, 2021. 18 Table of Contents Palantir Technologies Inc. Notes to Unaudited Condensed Consolidated Financial Statements Holders of common stock are entitled to dividends when, as and if declared by the Company’s Board of Directors, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends. No dividends have been declared as of September 30, 2021. In connection with the Company’s direct listing of its Class A common stock on the New York Stock Exchange (“Direct Listing”) in September 2020, all outstanding shares of redeemable convertible preferred stock and convertible preferred stock were converted into 4,017,378 and 793,725,807 shares of Class B common stock, respectively, and 1,005,000 shares of Class B common stock held by the Founders were exchanged for an equal number of shares of Class F common stock. The following represented the total authorized, issued, and outstanding shares for each class of common stock (in thousands): As of September 30, 2021 As of December 31, 2020 Authorized Issued and Outstanding Authorized Issued and Outstanding Common stock: Class A 20,000,000 1,900,441 20,000,000 1,542,058 Class B 2,700,000 89,672 2,700,000 249,077 Class F 1,005 1,005 1,005 1,005 Total 22,701,005 1,991,118 22,701,005 1,792,140 10. Stock-Based Compensation Stock Options The following table summarizes stock option activity for the nine months ended September 30, 2021 (in thousands, except per share amounts): Options Outstanding Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (years) Aggregate Intrinsic Value Balance as of December 31, 2020 535,767 $ 6.12 7.99 $ 9,340,245 Options exercised ( 155,720 ) 3.05 Options canceled and forfeited ( 5,518 ) 5.26 Balance as of September 30, 2021 374,529 $ 7.40 8.82 $ 6,230,308 Options vested and exercisable as of September 30, 2021 182,617 $ 4.48 7.08 $ 3,571,719 As of September 30, 2021, the unrecognized expense related to options outstanding was $ 940.0 million, which is expected to be recognized over a weighted-average service period of eight years . 19 Table of Contents Palantir Technologies Inc. Notes to Unaudited Condensed Consolidated Financial Statements RSUs The following table summarizes the RSU activity for the nine months ended September 30, 2021 (in thousands, except per share amounts): RSUs Outstanding Weighted Average Grant Date Fair Value per Share Unvested and outstanding as of December 31, 2020 184,870 $ 6.97 RSUs granted 25,093 24.01 RSUs vested ( 37,123 ) 8.17 RSUs canceled ( 6,807 ) 8.18 Unvested and outstanding as of September 30, 2021 166,033 $ 9.22 As of September 30, 2021, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $ 985.1 million, which the Company expects to recognize over three years . Growth Units In May 2019, the Company granted growth units which vest upon the satisfaction of both a performance-based vesting condition, which was satisfied upon the Company’s Direct Listing, and a service-based vesting condition, which was satisfied in March 2021. In March 2021, the 3.6 million outstanding growth units vested and, per the formula applicable to the awards, converted into 1.5 million shares of common stock. During the three months ended March 31, 2021, the Company recognized the remaining stock-based compensation expense related to the growth units of $ 1.2 million. Stock-based Compensation Expense Total stock-based compensation expense was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Cost of revenue $ 14,860 $ 94,385 $ 54,866 $ 120,285 Sales and marketing 57,124 263,958 186,418 322,353 Research and development 34,472 256,769 122,976 309,698 General and administrative 78,379 231,847 247,048 276,578 Total stock-based compensation expense (1) $ 184,835 $ 846,959 $ 611,308 $ 1,028,914 (1) On September 30, 2020, in connection with the Direct Listing, the Company incurred $ 769.5 million and $ 8.4 million of stock-based compensation using the accelerated attribution method related to the satisfaction of the performance-based vesting condition for RSUs and growth units, respectively, that had satisfied the service-based vesting condition as of such date. 11. Income Taxes The Company recorded a provision for income taxes of $ 1.4 million and a benefit from income taxes of $ 8.5 million for the three months ended September 30, 2021 and 2020, respectively, and a benefit from income taxes of $ 1.1 million and $ 5.0 million for the nine months ended September 30, 2021 and 2020, respectively. The Company is subject to income tax in the U.S. as well as other tax jurisdictions in which it conducts business. The Company’s effective rate differs from the U.S. statutory rate primarily due to the valuation allowance recorded on its losses from the U.S. and other jurisdictions, foreign income taxed at different rates, non-deductible stock-based compensation and the revaluation of its United Kingdom (“UK”) deferred tax assets as a result of a change in the UK corporate tax rate enacted during the second quarter of 2021, which increased the rate from 19 % to 25 % effective April 1, 2023. The realization of deferred tax assets is dependent upon the generation of sufficient taxable income of the appropriate character in future periods. The Company assesses its ability to realize the deferred tax assets on a quarterly basis, and it establishes a valuation allowance if it is more-likely-than-not that some portion of the deferred tax assets will not be realized. The Company weighs all available positive and negative evidence, including its earnings history and results of recent operations, scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies. For example, due to the weight of objectively verifiable negative evidence, including its history of losses in certain jurisdictions, the Company believes that it is more likely than not that its U.S. federal and state deferred tax assets will not be fully realized. Accordingly, the Company has maintained a valuation allowance on its U.S. federal and state deferred tax assets. 20 Table of Contents Palantir Technologies Inc. Notes to Unaudited Condensed Consolidated Financial Statements 12. Net Loss Per Share Attributable to Common Stockholders The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator Net loss attributable to common stockholders $ ( 102,137 ) $ ( 853,319 ) $ ( 364,191 ) $ ( 1,018,048 ) Less: Change in fair value attributable to participating securities — — — ( 5,483 ) Net loss attributable to common stockholders, for diluted net loss per share $ ( 102,137 ) $ ( 853,319 ) $ ( 364,191 ) $ ( 1,023,531 ) Denominator Weighted-average shares used in computing net loss per share, basic 1,964,395 905,462 1,893,911 713,879 Weighted-average shares used in computing net loss per share, diluted 1,964,395 905,462 1,893,911 716,027 Net loss per share Net loss per share attributable to common stockholders, basic $ ( 0.05 ) $ ( 0.94 ) $ ( 0.19 ) $ ( 1.43 ) Net loss per share attributable to common stockholders, diluted $ ( 0.05 ) $ ( 0.94 ) $ ( 0.19 ) $ ( 1.43 ) The following outstanding potentially dilutive common stock equivalents have been excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented due to their anti-dilutive effect (in thousands): As of September 30, 2021 2020 Warrants to purchase common stock 13,042 19,068 Options and Stock Appreciation Rights issued and outstanding 374,555 587,977 RSUs outstanding 166,033 199,655 Growth units outstanding — 3,583 Total 553,630 810,283 13. Segment and Geographic Information The following tables reflect the results of the Company’s reportable operating segments consistent with the manner in which the chief operating decision maker (“CODM”) evaluates the performance of each segment and allocates the Company’s resources. The CODM does not evaluate the performance of the Company’s assets on a segment basis for internal management reporting and, therefore, such information is not presented. Contribution is used, in part, to evaluate the performance of, and allocate resources to, each of the segments. A segment’s contribution is calculated as segment revenue less the related costs of revenue and sales and marketing expenses. It excludes certain operating expenses that are not allocated to segments because they are separately managed at the consolidated corporate level. These unallocated costs include stock-based compensation expense, research and development expenses, and general and administrative expenses. 21 Table of Contents Palantir Technologies Inc. Notes to Unaudited Condensed Consolidated Financial Statements Financial information for each reportable segment was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenue: Government $ 217,836 $ 162,561 $ 658,375 $ 420,257 Commercial 174,310 126,805 450,647 350,325 Total revenue $ 392,146 $ 289,366 $ 1,109,022 $ 770,582 Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Contribution: Government $ 125,706 $ 93,962 $ 400,705 $ 226,186 Commercial 98,177 69,496 245,841 168,908 Total contribution $ 223,883 $ 163,458 $ 646,546 $ 395,094 The reconciliation of contribution to loss from operations is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Loss from operations $ ( 91,941 ) $ ( 847,777 ) $ ( 352,103 ) $ ( 1,017,107 ) Research and development expenses (1) 59,844 57,146 180,335 156,832 General and administrative expenses (1) 71,145 107,130 207,006 226,455 Stock-based compensation expense 184,835 846,959 611,308 1,028,914 Total contribution $ 223,883 $ 163,458 $ 646,546 $ 395,094 (1) Excludes stock-based compensation expense. Geographic Information Revenue by geography is based on the customer’s headquarters or agency location at the time of sale. Revenue is as follows (in thousands, except percentages): Three Months Ended September 30, 2021 2020 Amount % Amount % Revenue: United States $ 227,285 58 % $ 156,336 54 % United Kingdom 47,914 12 % 35,432 12 % Rest of world (1) 116,947 30 % 97,598 34 % Total revenue $ 392,146 100 % $ 289,366 100 % (1) No other country represents 10 % or more of total revenue for the three months ended September 30, 2021 or 2020. 22 Table of Contents Palantir Technologies Inc. Notes to Unaudited Condensed Consolidated Financial Statements Nine Months Ended September 30, 2021 2020 Amount % Amount % Revenue: United States $ 625,662 56 % $ 391,106 51 % United Kingdom 122,234 11 % 94,440 12 % France 61,558 6 % 78,572 10 % Rest of world (1) 299,568 27 % 206,464 27 % Total revenue $ 1,109,022 100 % $ 770,582 100 % (1) No other country represents 10 % or more of total revenue for the nine months ended September 30, 2021 or 2020. 14. Subsequent Events Investment Commitments and Investments The Company approved and entered into additional Investment Agreements from October 1, 2021 through the date of this filing. As of the date of this filing, the Company had additional outstanding investment commitments, subject to applicable terms and conditions, to purchase a total of 2.6 million shares for an aggregate purchase price of $ 26.0 million. The following table presents details regarding the Company’s additional investment commitments outstanding as of the date of this filing (in thousands): Entity Investment Agreement Date Committed Share Amount Committed Investment Amount Telecommunications company (1) October 6, 2021 1,600 $ 16,000 Rigetti & Co, Inc. (1) October 6, 2021 1,000 10,000 Tota l 2,600 $ 26,000 (1) Commercial contract contains termination for convenience clauses in the event the proposed business combination and/or the Company’s proposed investment is not completed. In connection with signing each of the Investment Agreements entered into between October 1, 2021 and the date of this filing, each Investee or an associated entity and the Company entered into a commercial contract for the Company’s products and services. The maximum potential revenue from these commercial contracts, including option years, is $ 26.0 million, and the terms of such agreements range from three to four years . Additionally, from October 1 to the date of this filing, the Company purchased 5.5 million shares for an aggregate purchase price of $ 55.0 million, as set forth in the following table (in thousands): Entity Share Amount Investment Amount Babylon Health (1) 3,500 $ 35,000 Mobility company (1) 2,000 20,000 Total 5,500 $ 55,000 (1) Reflected as commitments in Note 8. Commitments and Contingencies - Investment Commitments as of September 30, 2021. 23 Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “would,” “intend,” “target,” “goal,” “outlook,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about: • our expectations regarding financial performance and liquidity, including but not limited to our expectations regarding revenue, cost of revenue, operating expenses, stock-based compensation, our ability to achieve and maintain future profitability, and cash flows; • our ability to successfully execute our business and growth strategy; • the sufficiency of our cash and cash equivalents to meet our liquidity needs; • the demand for our platforms in general; • our ability to increase our number of customers and revenue generated from customers; • our expectations regarding the future contribution margin of our existing and future customers; • our expectations regarding our ability to quickly and effectively integrate our platforms for our existing and future customers; • our ability to develop new platforms, and enhancements to existing platforms, and bring them to market in a timely manner; • our market share, category positions, and market trends, including our ability to grow our business in large government and commercial organizations, including our expectations regarding the impact of Federal Acquisition Streamlining Act of 1994 (“FASA”); • our ability to compete with existing and new competitors in existing and new markets and products; • our expectations regarding anticipated technology needs and developments and our ability to address those needs and developments with our platforms; • our expectations regarding litigation and legal and regulatory matters; • our expectations regarding our ability to meet existing performance obligations and maintain the operability of our products; • our expectations regarding the effects of existing and developing laws and regulations, including with respect to taxation, privacy data protection, and cybersecurity; • our expectations regarding new and evolving markets; • our ability to develop and protect our brand; • our ability to maintain the security and availability of our platforms; • our expectations and management of future growth; • our expectations concerning relationships with third parties, including our customers, equity method investment partners, and vendors; • our expectations regarding our recent investments in, and enterprise agreements with, various entities, including special purpose acquisition companies and/or other privately-held or publicly-traded entities; • our ability to maintain, protect, and enhance our intellectual property; • our expectations regarding our multi-class stock and governance structure and the benefits thereof; • the impact of the ongoing COVID-19 pandemic, including on our and our customers’, vendors’, and partners’ respective businesses and the markets in which we and our customers, vendors, and partners operate; and • the increased expenses associated with being a public company. We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. 24 Table of Contents You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in the section titled “ Risk Factors ” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on any forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in such forward-looking statements. Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, restructurings, joint ventures, partnerships, channel sales relationships, or investments we may make. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. 25 Table of Contents