What changed in this filing

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Item 1. Financial Statements

2022-11-07 compared with 2022-08-08 · 116 added, 112 removed, 454 unchanged (33% of the section changed)

3 unchanged sentences

(in thousands, except per share amounts)

As of June 30, As of December 31,

As of September 30, As of December 31,

Current assets:

26 unchanged sentences

Common stock, $ 0.001 par value:

20,000,000 Class A shares authorized as of June 30, 2022 and December 31, 2021;

1,962,382 and 1,926,589 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively;

2,700,000 Class B shares authorized as of June 30, 2022 and December 31, 2021;

99,354 and 99,880 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively;

and 1,005 Class F shares authorized, issued, and outstanding as of June 30, 2022 and December 31, 2021

20,000,000 Class A shares authorized as of September 30, 2022 and December 31, 2021;

1,978,797 and 1,926,589 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively;

2,700,000 Class B shares authorized as of September 30, 2022 and December 31, 2021;

99,862 and 99,880 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively;

and 1,005 Class F shares authorized, issued, and outstanding as of September 30, 2022 and December 31, 2021

Additional paid-in capital 8,284,686 7,777,085

7 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

22 unchanged sentences

(in thousands)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

9 unchanged sentences

Shares Amount

Balance as of March 31, 2022 2,045,876 $ 2,046 $ 7,953,856 $ ( 4,044 ) $ ( 5,587,112 ) $ 2,364,746

Balance as of June 30, 2022 2,062,741 $ 2,063 $ 8,119,876 $ ( 6,674 ) $ ( 5,766,441 ) $ 2,348,824

Issuance of common stock from the exercise of stock options 4,907 5 24,562 — — 24,567

Issuance of common stock upon vesting of RSUs 12,085 12 ( 12 ) — — —

Issuance of common stock upon vesting of restricted stock units ("RSUs") 12,016 12 ( 12 ) — — —

Stock-based compensation — — 140,260 — — 140,260

1 unchanged sentence

Net loss — — — — ( 123,875 ) ( 123,875 )

Balance as of June 30, 2022 2,062,741 $ 2,063 $ 8,119,876 $ ( 6,674 ) $ ( 5,766,441 ) $ 2,348,824

Balance as of September 30, 2022 2,079,664 $ 2,080 $ 8,284,686 $ ( 9,835 ) $ ( 5,890,316 ) $ 2,386,615

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity

6 unchanged sentences

Net loss — — — — ( 404,583 ) ( 404,583 )

Balance as of June 30, 2022 2,062,741 $ 2,063 $ 8,119,876 $ ( 6,674 ) $ ( 5,766,441 ) $ 2,348,824

Balance as of September 30, 2022 2,079,664 $ 2,080 $ 8,284,686 $ ( 9,835 ) $ ( 5,890,316 ) $ 2,386,615

Palantir Technologies Inc.

1 unchanged sentence

(in thousands)

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income Accumulated Deficit Total Stockholders’ Equity

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity

Shares Amount

Balance as of March 31, 2021 1,860,607 $ 1,860 $ 6,892,046 $ 865 $ ( 5,088,828 ) $ 1,805,943

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 RSUs 13,291 13 ( 13 ) — — —

Issuance of common stock upon net exercise of common stock warrants and other 3,928 5 1,707 — — 1,712

Stock-based compensation — — 184,995 — — 184,995

1 unchanged sentence

Net loss — — — — ( 102,137 ) ( 102,137 )

Balance as of June 30, 2021 1,936,578 $ 1,937 $ 7,294,369 $ 65 $ ( 5,227,408 ) $ 2,068,963

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity

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 Loss Accumulated Deficit Total Stockholders’ Equity

Shares Amount

7 unchanged sentences

Net loss — — — — ( 364,191 ) ( 364,191 )

Balance as of June 30, 2021 1,936,578 $ 1,937 $ 7,294,369 $ 65 $ ( 5,227,408 ) $ 2,068,963

Balance as of September 30, 2021 1,991,118 $ 1,991 $ 7,577,305 $ ( 1,695 ) $ ( 5,329,545 ) $ 2,248,056

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Operating activities

22 unchanged sentences

Proceeds from sales of marketable securities 36,482 —

Proceeds from redemption of marketable securities 4,619 —

Purchases of alternative investments — ( 50,941 )

Other investing activities — ( 3,000 )

Net cash used in investing activities ( 118,508 ) ( 216,039 )

19 unchanged sentences

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 unaudited condensed consolidated financial statements have been prepared in accordance with United States (“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.

1 unchanged sentence

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.

Investments in entities where the Company holds at least a 20% ownership interest and has the ability to exercise significant influence over, but does not control, the investee are accounted for using the equity method of accounting.

Certain prior year balances have been reclassified to conform to the current year presentation.

16 unchanged sentences

Significant Accounting Policies in the notes to consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on February 24, 2022.

There have been no significant changes to these policies during the six months ended June 30, 2022.

There have been no significant changes to these policies during the nine months ended September 30, 2022.

Cash, Cash Equivalents, and Restricted Cash

5 unchanged sentences

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 June 30,

As of September 30,

Cash and cash equivalents $ 2,411,290 $ 2,335,068

3 unchanged sentences

Accounts Receivable and Allowance for Credit Losses

Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses, if any.

Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses.

The Company generally grants non-collateralized credit terms to its customers.

1 unchanged sentence

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 Company’s assessment as of June 30, 2022 and December 31, 2021, the allowances for credit losses were not material.

Based upon the Company’s assessment as of September 30, 2022 and December 31, 2021, the allowances for credit losses were not material.

Concentrations of Risk

5 unchanged sentences

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 June 30, 2022 and December 31, 2021 were $ 265.8 million and $ 190.9 million, respectively.

No single customer represented more than 10 % of total accounts receivable as of June 30, 2022 or December 31, 2021.

For the three and six months ended June 30, 2022 and 2021, no customer represented more than 10 % of total revenue.

The Company’s accounts receivable balances as of September 30, 2022 and December 31, 2021 were $ 343.3 million and $ 190.9 million, respectively.

Customers J and I represented 17 % and 13 % of total accounts receivable as of September 30, 2022.

No other single customer represented more than 10% of total accounts receivable as of September 30, 2022 or December 31, 2021.

For the three and nine months ended September 30, 2022 and 2021, no customer represented more than 10% of total revenue.

Contract Liabilities and Remaining Performance Obligations

1 unchanged sentence

The Company’s contract liabilities consist of deferred revenue and customer deposits.

As of June 30, 2022 and December 31, 2021, the Company's contract liability balances were $ 430.0 million and $ 463.3 million, respectively.

Revenue of $ 299.2 million and $ 285.4 million was recognized during the six months ended June 30, 2022 and 2021, respectively, that was included in the contract liability balances as of December 31, 2021 and 2020, respectively.

As of September 30, 2022 and December 31, 2021, the Company's contract liability balances were $ 460.8 million and $ 463.3 million, respectively.

Revenue of $ 353.8 million and $ 347.7 million was recognized during the nine months ended September 30, 2022 and 2021, respectively, that was included in the contract liability balances as of December 31, 2021 and 2020, respectively.

Remaining Performance Obligations

6 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

The Company’s remaining performance obligations were $ 1.2 billion as of June 30, 2022, of which the Company expects to recognize approximately 44 % as revenue over the next 12 months, 43 % as revenue over the subsequent 13 to 36 months, and the remainder thereafter.

The Company’s remaining performance obligations were $ 1.3 billion as of September 30, 2022, of which the Company expects to recognize approximately 44 % as revenue over the next 12 months, 42 % as revenue over the subsequent 13 to 36 months, and the remainder thereafter.

Disaggregation of Revenue

2 unchanged sentences

The following tables present the Company’s assets that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation (in thousands):

As of June 30, 2022

As of September 30, 2022

Total Level 1 Level 2 Level 3

24 unchanged sentences

Realized and unrealized gains and losses are recorded in other income (expense), net on the condensed consolidated statements of operations.

During the three and six months ended June 30, 2022, the Company recorded net unrealized losses of $ 122.8 million and $ 174.7 million, respectively, and realized losses of $ 15.7 million and $ 26.6 million, respectively, within other income (expense), net on the condensed consolidated statements of operations.

Since 2021, the Company has approved and entered into certain agreements (“Investment Agreements”) to purchase, or commit to purchase, as further discussed in Note 7.

Commitments and Contingencies — Investment Commitments , shares of various

During the three and nine months ended September 30, 2022, the Company recorded net unrealized losses of $ 18.0 million and $ 192.8 million, respectively, and realized losses of $ 41.3 million and $ 67.9 million, respectively, within 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 and no realized losses within other income (expense), net on the condensed consolidated statements of operations.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

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”).

Since 2021, the Company has approved and entered into certain agreements (“Investment Agreements”) to purchase shares of various entities, including special purpose acquisition companies and/or other privately-held or publicly-traded entities (each, an “Investee,” and such purchases, the “Investments”).

During the nine months ended September 30, 2022 and the year ended December 31, 2021, the Company purchased shares for a total investment of $ 124.5 million and $ 326.0 million, respectively.

During the three months ended September 30, 2022, the Company purchased 3.5 million shares of Rubicon Technologies for $ 35.0 million pursuant to the applicable Investment Agreement.

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 total value of such commercial contracts was $ 754.9 million as of June 30, 2022, which is inclusive of $ 116.2 million of contractual options.

The terms of such contracts, including 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.

The Company assesses the concurrent agreements under the non-monetary guidance within ASC 606— Revenue from Contracts with Customers as well as the commercial substance of each arrangement considering the customer’s ability and intention to pay as well as the Company’s obligation to perform under each contract.

The total revenue recognized from these commercial contracts during the three and six months ended June 30, 2022 was $ 31.4 million and $ 70.6 million, respectively.

During the six months ended June 30, 2022 and the year ended December 31, 2021, the Company purchased shares for a total investment of $ 89.5 million and $ 326.0 million, respectively.

No investments were purchased under such Investment Agreements during the three months ended June 30, 2022.

The majority of these commercial contracts are subject to various termination provisions.

The Company assesses the concurrent agreements under the noncash and consideration paid or payable to a customer guidance within ASC 606— Revenue from Contracts with Customers as well as the commercial substance of each arrangement considering the customer’s ability and intention to pay as well as the Company’s obligation to perform under each contract.

As currently assessed, the total value of such commercial contracts with Investees or associated entities was $ 754.9 million as of September 30, 2022, which is inclusive of $ 116.2 million of contractual options.

As of September 30, 2022, the cumulative amount of revenue recognized from commercial contracts with Investees was $ 147.0 million, of which $ 28.1 million and $ 98.7 million of revenue was recognized during the three and nine months ended September 30, 2022, respectively.

Alternative Investments

2 unchanged sentences

The Company is able to take physical possession of the gold bars stored at the facility at any time with reasonable notice.

During the three and nine months ended September 30, 2022, the Company recorded net unrealized losses of $ 2.6 million related to alternative investments within 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 $ 1.8 million related to alternative investments within other income (expense), net on the condensed consolidated statements of operations.

Balance Sheet Components

1 unchanged sentence

Property and equipment, net consisted of the following (in thousands):

As of June 30,

2022 As of December 31, 2021

As of September 30, 2022 As of December 31, 2021

Leasehold improvements $ 77,320 $ 72,834

5 unchanged sentences

Total property and equipment, net $ 57,822 $ 31,304

Depreciation and amortization expense related to property and equipment, net was $ 4.5 million and $ 3.1 million for the three months ended June 30, 2022 and 2021, respectively, and $ 8.4 million and $ 6.3 million for the six months ended June 30, 2022 and 2021, respectively.

Depreciation and amortization expense related to property and equipment, net was $ 5.5 million and $ 3.1 million for the three months ended September 30, 2022 and 2021, respectively, and $ 13.9 million and $ 9.3 million for the nine months ended September 30, 2022 and 2021, respectively.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

As of June 30,

2022 As of December 31, 2021

As of September 30, 2022 As of December 31, 2021

Accrued payroll and related expenses $ 52,991 $ 60,732

Accrued legal 42,912 13,086

Accrued other liabilities 111,706 95,074

Total accrued liabilities $ 164,697 $ 155,806

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

2014 Credit Facility

In October 2014, the Company entered into an unsecured revolving credit facility, which has been subsequently secured by substantially all of the Company’s assets and amended from time to time (as amended, the “2014 Credit Facility”), including on March 31, 2022 (the “March 2022 Amendment”).

The March 2022 Amendment provides for, among other things, an extension of the revolving loan facility maturity date to March 31, 2027 and an increase of $ 100.0 million to the lenders’ revolving commitments for total revolving commitments of $ 500.0 million.

The 2014 Credit Facility allows for the drawdown of up to $ 500.0 million to fund working capital and general corporate expenditures.

The March 2022 Amendment provided for, among other things, an extension of the revolving loan facility maturity date to March 31, 2027 and an increase of $ 100.0 million to the lenders’ revolving commitments for total revolving commitments of $ 500.0 million.

The July 2022 Amendment provided for, among other things, a new incremental delayed draw term loan (“DDTL”) facility in an aggregate principal amount of up to $ 450.0 million, upon the terms and conditions set forth in the 2014 Credit Facility, as amended, with new and existing lenders.

The DDTL facility is available to draw upon through July 1, 2023 and any drawn amounts will mature on March 31, 2027.

As of September 30, 2022, the 2014 Credit Facility allows for the drawdown of up to $ 950.0 million to fund working capital and general corporate expenditures.

Outstanding balances under the 2014 Credit Facility would incur interest at the Secured Overnight Financing Rate (“SOFR”) as administered by the Federal Reserve Bank of New York, or a successor administrator of the SOFR (or the applicable benchmark replacement), plus 2.00 % or a base rate plus 1.00 %, subject to certain adjustments.

2 unchanged sentences

The 2014 Credit Facility also allows for an incremental loan facility of additional term loans or revolving loans in an aggregate principal amount up to the amount and upon the terms and conditions set forth therein with one or more existing or new lenders upon mutual agreement between the Company and such lenders.

The 2014 Credit Facility was subsequently amended in July 2022.

Subsequent Events for additional information.

As of June 30, 2022, the Company had no outstanding debt balances and $ 500.0 million undrawn revolving commitments under the 2014 Credit Facility.

As of September 30, 2022, the Company had no outstanding debt balances and $ 950.0 million undrawn of revolving or DDTL commitments under the 2014 Credit Facility.

The 2014 Credit Facility contains customary representations 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 June 30, 2022.

The Company was in compliance with all covenants associated with the 2014 Credit Facility as of September 30, 2022.

Commitments and Contingencies

4 unchanged sentences

In May 2022, the agreement was amended to extend the second contract year from June 30, 2022 to September 30, 2022 and the optional carryover period from June 30, 2029 to September 30, 2029.

As of June 30, 2022, the Company had satisfied $ 157.3 million of its $ 167.0 million commitment for the contract year ending September 30, 2022.

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 June 30, 2022, the Company had an outstanding investment commitment relating to the planned merger of Rubicon Technologies, LLC (“Rubicon”) with Founder SPAC, effective as of December 15, 2021, subject to the applicable terms and conditions, to purchase a total of 3.5 million shares for an aggregate purchase price of $ 35.0 million.

The closing of such investment commitment is contingent upon the completion of a proposed business combination by and among Rubicon and other applicable parties.

The Company’s commercial contract with Rubicon contains termination for convenience clauses in the event the proposed business combination or the Company’s proposed investment is not completed.

The Company satisfied its $ 167.0 million commitment for the contract year ended September 30, 2022.

The commitment amount for the contract year ending September 30, 2023 is $ 199.0 million.

Litigation and Legal Proceedings

3 unchanged sentences

securities claims;

investor claims;

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

corporate claims;

7 unchanged sentences

intellectual property;

government regulation or compliance (including but not limited to anti-corruption requirements, export or other trade controls, data privacy or data

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

protection, cybersecurity requirements, or antitrust/competition law requirements);

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);

or other matters.

4 unchanged sentences

On June 27, 2022, the Company and the KT4 Plaintiffs entered into an agreement to settle the litigation and certain other matters.

The Company has recorded the amount of the settlement in accrued liabilities and an estimate of the amount to be received from the Company’s insurance in prepaid expenses and other current assets on the condensed consolidated balance sheets as of June 30, 2022.

As of June 30, 2022, 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.

The Company has paid the amount of the settlement in full and has received the insurance reimbursement as of September 30, 2022.

On September 15, 2022, October 25, 2022, and November 4, 2022, putative securities class action complaints were filed in the United States District Court for the District of Colorado, captioned Cupat v.

Palantir Technologies Inc., et al.

1:22-cv-02384, Allegheny County Employees’ Retirement System v.

Palantir Technologies, Inc., et al., Case No.

1:22-cv-02805, and Shijun Liu, Individually and as Trustee of the Liu Family Trust 2019 v.

Palantir Technologies Inc., et al., Case No.

1:22-cv-02893, respectively, naming the Company and certain current and former officers and directors as defendants.

The suits allege false and misleading statements about our business and prospects, and purport to allege claims under the Securities Exchange Act of 1934 and the Securities Act of 1933.

The Company disputes these claims and intends to defend these matters vigorously.

Because the litigation is in early stages, the Company is unable to estimate the reasonably possible loss or range of loss, if any, that may result from these matters.

As of September 30, 2022, 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 $ 56.8 million and $ 76.2 million as of June 30, 2022 and December 31, 2021, respectively, which were fully collateralized.

The Company had irrevocable standby letters of credit and guarantees, including bank guarantees, outstanding in the amounts of $ 41.5 million and $ 76.2 million as of September 30, 2022 and December 31, 2021, respectively, which were fully collateralized.

The Company is required to maintain these letters of credit and guarantees primarily in connection with operating lease agreements, certain customer contracts, and other guarantees and financing arrangements.

As of June 30, 2022, these letters of credit and guarantees had expiration dates through August 31, 2031.

As of September 30, 2022, these letters of credit and guarantees had expiration dates through August 31, 2031.

Warranties and Indemnification

4 unchanged sentences

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 June 30, 2022 and December 31, 2021.

The Company has not recorded warranty expense or related accruals as of September 30, 2022 and December 31, 2021.

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.

3 unchanged sentences

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 June 30, 2022 and December 31, 2021.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

foreseeable future.

As such, the Company has not recorded a liability for infringement costs as of September 30, 2022 and December 31, 2021.

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.

3 unchanged sentences

The Class F common stock has the voting rights generally described herein 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

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

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 100.0 million of the Company's equity securities as of June 30, 2022.

All shares of Class F common stock are held in a voting trust established by Stephen Cohen, Alexander Karp, and Peter Thiel (the “Founders”).

Holders of the 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 June 30, 2022.

No dividends have been declared as of September 30, 2022.

The following represented the total authorized, issued, and outstanding shares for each class of common stock (in thousands):

As of June 30, 2022 As of December 31, 2021

As of September 30, 2022 As of December 31, 2021

Authorized Issued and Outstanding Authorized Issued and Outstanding

5 unchanged sentences

Stock Options

The following table summarizes stock option activity for the six months ended June 30, 2022 (in thousands, except per share amounts):

The following table summarizes stock option activity for the nine months ended September 30, 2022 (in thousands, except per share amounts):

Options Outstanding Weighted-Average Exercise Price Per Share

4 unchanged sentences

Options canceled and forfeited ( 2,490 ) 4.91

Balance as of June 30, 2022 336,576 $ 7.95 8.74 $ 750,129

Options vested and exercisable as of June 30, 2022 175,943 $ 5.46 7.68 $ 676,872

As of June 30, 2022, the total unrecognized stock-based compensation expense related to options outstanding was $ 799.2 million, which is expected to be recognized over a weighted-average service period of eight years .

The following table summarizes the RSU activity for the six months ended June 30, 2022 (in thousands, except per share amounts):

Balance as of September 30, 2022 331,121 $ 8.00 8.54 $ 568,915

Options vested and exercisable as of September 30, 2022 179,077 $ 5.61 7.55 $ 525,193

As of September 30, 2022, the total unrecognized stock-based compensation expense related to options outstanding was $ 759.7 million, which is expected to be recognized over a weighted-average service period of eight years .

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The following table summarizes the RSU activity for the nine months ended September 30, 2022 (in thousands, except per share amounts):

RSUs Outstanding Weighted Average Grant Date Fair Value per Share

3 unchanged sentences

RSUs canceled ( 6,479 ) 9.32

Balance as of June 30, 2022 136,710 $ 10.11

As of June 30, 2022, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $ 826.7 million, which the Company expects to recognize over a weighted-average service period of three years .

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Balance as of September 30, 2022 131,107 $ 10.15

As of September 30, 2022, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $ 779.3 million, which the Company expects to recognize over a weighted-average service period of three years .

Stock-based Compensation Expense

Total stock-based compensation expense was as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

4 unchanged sentences

Total stock-based compensation expense $ 140,308 $ 184,835 $ 435,400 $ 611,308

The Company recorded a provision for income taxes of $ 2.6 million and a benefit from income taxes of $ 5.7 million for the three months ended June 30, 2022 and 2021, respectively, and a provision for income taxes of $ 4.6 million and a benefit from income taxes of $ 2.6 million for the six months ended June 30, 2022 and 2021, respectively.

The Company recorded a provision for income taxes of $ 1.1 million and $ 1.4 million for the three months ended September 30, 2022 and 2021, respectively, and a provision for income taxes of $ 5.7 million and a benefit from income taxes of $ 1.1 million for the nine months ended September 30, 2022 and 2021, 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 tax rate as of June 30, 2022 differs from the U.S.

statutory rate primarily due to foreign income taxed at different rates, foreign withholding taxes, and valuation allowances recorded on its losses from the U.S., U.K., and other jurisdictions .

The provision for income taxes increased by $ 8.2 million and $ 7.2 million for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021 primarily due to the revaluation of the Company’s United Kingdom (“U.K.”) deferred tax assets as a result of a change in the U.K.

The Company’s effective tax rate as of September 30, 2022 differs from the U.S.

statutory rate primarily due to foreign income taxed at different rates, foreign withholding taxes, and valuation allowances recorded on its losses from the U.S., United Kingdom (“U.K.”), and other jurisdictions .

The provision for income taxes decreased by $ 0.3 million and increased by $ 6.8 million from a benefit from income taxes for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021.

These changes are primarily due to the absence in the current period of the revaluation of the Company’s U.K.

deferred tax assets as a result of a change in the U.K.

corporate tax rate enacted in June 2021.

6 unchanged sentences

Accordingly, the Company has maintained a full valuation allowance on its U.S.

deferred tax assets as of June 30, 2022.

deferred tax assets as of September 30, 2022.

Provisions enacted in the 2017 Tax Cuts and Jobs Act related to the capitalization for tax purposes of research and experimental (“R&E”) expenditures became effective on January 1, 2022.

6 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

On August 16, 2022, the U.S.

enacted the Inflation Reduction Act of 2022, which, among other things, implements a 15% minimum tax on book income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy.

Based on the Company's current analysis of the provisions, the Company does not believe this legislation will have a material impact on its condensed consolidated financial statements.

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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

6 unchanged sentences

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 June 30,

As of September 30,

Options and stock appreciation rights issued and outstanding 331,121 374,555

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These unallocated costs include stock-based compensation expense, research and development expenses, and general and administrative expenses.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Financial information for each reportable segment was as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

2 unchanged sentences

Total revenue $ 477,880 $ 392,146 $ 1,397,247 $ 1,109,022

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

4 unchanged sentences

The reconciliation of contribution to loss from operations is as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

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Revenue is as follows (in thousands, except percentages):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

5 unchanged sentences

Total revenue $ 477,880 100 % $ 392,146 100 % $ 1,397,247 100 % $ 1,109,022 100 %

(1) No other country represents 10 % or more of total revenue for the three and six months ended June 30, 2022 or 2021.

Subsequent Events

On July 1, 2022, the Company entered into an amendment (the “July 2022 Amendment”) to the 2014 Credit Facility, which provided for, among other things, a new incremental delayed draw term loan (“DDTL”) facility in an aggregate principal amount of up to $ 450.0 million, upon the terms and conditions set forth in the 2014 Credit Facility, as amended, with new and existing lenders.

The DDTL facility is available to draw upon through July 1, 2023 and any drawn amounts will mature on March 31, 2027.

The DDTL facility, together with the Company’s existing revolving credit facility with an aggregate principal amount of up to $ 500.0 million, provides for total revolving and DDTL commitments of up to $ 950.0 million available to draw to fund working capital and general corporate expenditures.

No amounts were drawn as of the date of this Quarterly Report on Form 10-Q.

(1) No other country represents 10 % or more of total revenue for the three and nine months ended September 30, 2022 or 2021.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

44 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements