What changed in this filing

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Item 1. Business

2023-02-21 compared with 2022-02-24 · 56 added, 54 removed, 191 unchanged (37% of the section changed)

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Apollo is a cloud-agnostic, single control layer that coordinates ongoing delivery of new features, security updates, and platform configurations, helping to ensure the continuous operation of critical systems and allowing our customers to run their software in virtually any environment.

Recent crises and systemic shocks, such as the COVID-19

pandemic, have made clear to many of our customers that accommodating the extended timelines ordinarily required to realize results from implementing new software solutions is not a viable option.

Recent crises and systemic shocks, such as the ongoing COVID-19 pandemic and the ongoing Russia-Ukraine conflict, have made clear to many of our customers that accommodating the extended timelines ordinarily required to realize results from implementing new software solutions is not a viable option.

As a result, customers are increasingly adopting our software, which can be ready in days, over internal software development efforts, which may take months or years.

See further discussion in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operation — Overview — COVID-19

See further discussion

in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Macroeconomic Trends .

Our Platforms

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Gotham enables users to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants.

It also facilitates the hand-off

between analysts and operational users, helping operators plan and execute real-world responses to threats that have been identified within the platform.

It also facilitates the hand-off between analysts and operational users, helping operators plan and execute real-world responses to threats that have been identified within the platform.

Gotham is now used broadly across government functions.

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We originally built Apollo to enable the continuous delivery of our software wherever our customers are:

in the cloud, on-premises,

or even more rugged environments.

in the cloud, on-premises, or even more rugged environments.

Today, Apollo enables the rapid, secure delivery of our software and updates across our business.

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In 2022, we earned 61% of our revenue from customers in the United States, and 39% from those abroad.

Our average revenue per customer during the trailing twelve months ended December 31, 2021 was $6.5 million, which is down from 2020, when our average revenue per customer during the trailing twelve months ended December 31, 2020 was $7.9 million, reflecting our continued acceleration in customer acquisition.

The average revenue for our top twenty customers during the trailing twelve months ended December 31, 2022 was $49.4 million, and is up from 2021, when the average revenue from our top 20 customers during the trailing twelve months ended December 31, 2021 was $43.6 million, demonstrating our expanding relationships with existing customers.

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Our software is in the hands of factory workers, soldiers, clinicians, prosecutors, investigators, claims adjusters, technicians, intelligence analysts, and social workers around the world.

It is used by assembly workers in France, pharmaceutical researchers in Germany, public health administrators in the United Kingdom, and special forces personnel and senior military officials in the United States.

It is used in a variety of applications including by utility operations analysts, automotive manufacturing workers, oil and gas technicians and operators, and pharmaceutical researchers in the United States;

supply-chain managers in South Korea;

assembly workers in France;

public health administrators in the United Kingdom and the United States;

and special forces personnel and military officials in the United States and abroad.

Industries and Sectors

In addition to supporting individual institutions, our platforms have become central operating systems for entire industries and sectors.

Our work with Airbus, for example, was initially focused on the production of the A350 aircraft.

Our work with Airbus S.A.S.

(“Airbus”), for example, was initially focused on the production of the A350 aircraft.

The deployment of our software soon grew into Skywise, our aviation platform that has become the central operating system of the airline industry.

Skywise connects more than 9,000 aircraft across more than 100 airlines.

Skywise connects more than 10,000 aircraft across a growing community of airlines, maintenance and repair organizations, authorities, and Airbus.

Decision makers at each of these institutions use Skywise to more efficiently design, manufacture, service, operate, and maintain their global fleets.

Our work with healthcare organizations across both the commercial and government sectors in the United States and globally has helped modernize public health information systems, including by facilitating pandemic management across U.S.

government agencies, integrating and harmonizing clinical trial data, and enabling proactive coordination across multi-threaded teams to effectively respond to real-time changes in patient demand and nursing supply.

Similarly, when it comes to our work with defense and intelligence agencies, our software is not only used by individual organizations but is also used to enable sharing of information and collaboration across agencies and countries.

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Sales and Marketing

Our approach to sales and marketing is built around the first two phases of our business model, as described in the section titled “ Management’s Discussion and Analysis of Financial Condition and Results of Operation — Our Business Model

customer acquisition (in the Acquire phase) and account growth (in the Expand phase).

Our approach to sales and marketing is built around discussions with existing and prospective customers in order to understand the principal challenges our customers face and identify ways in which our software platforms can provide long-term value and results.

Customer Acquisition

Our customer acquisition strategy targets large-scale, hard-to-execute

opportunities at large government and commercial institutions.

Our customer acquisition strategy targets large-scale, hard-to-execute opportunities at large government and commercial institutions.

The high installation costs, high failure risks, complexity of data environments, and the long sales cycles associated with these opportunities raise the barriers to entry for competition.

The larger, more complex, and more technologically demanding the problem, the more likely we are to succeed.

Additionally, we have begun expanding access to our platforms to early- and growth-stage companies, including startups, as we continue our outreach efforts to an increasingly broad swath of our potential market.

Additionally, our focus in the short term remains making our principal software platforms available to an increasingly broad swath of our potential market.

We believe that every institution faces challenges that our platforms and products were designed to address.

Across both the public and private sectors, there is a history of failures when investing in new technologies.

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Expansion of Access to Platforms

We have recently begun to expand access to our platforms to early- and growth-stage companies, including startups, as we continue our outreach efforts to an increasingly broad swath of the potential market.

The speed with which our platforms can be deployed has significantly expanded the range of potential customers with which we plan on partnering over the long term.

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We believe that, as these new partners grow, we will grow with them.

We have also made a number of investments in companies whose businesses rely on the ability of their organizations to manage and analyze data effectively at scale.

We have also made a number of investments in companies whose businesses rely on the ability of their organizations to manage and analyze data effectively at scale, though we do not currently anticipate entering into new investments to purchase, or commit to purchase, securities of special purpose acquisition companies.

Our proximity to these businesses and the industries in which they are operating has enhanced, and is expected to continue enhancing, our own product and business development efforts, as we continue expanding access to our platforms to the broadest possible set of customers.

Direct Sales Force

We have invested and continue to invest in an account-based sales force to identify new customers and opportunities.

We believe that our decision to grow our sales force in recent years has resulted in multiple new customers that are in the Fortune 100 and include leading government agencies around the world.

We will continue to expand headcount in our direct sales force.

We have invested and continue to invest in an account-based sales force to identify and capture new customers and opportunities.

We believe that our decision to grow our sales force in recent years has resulted in multiple new customers, broadening and expanding our commercial customer base and relationships with leading government agencies around the world.

Sector and Industry Platforms

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For example, Skywise is our aviation platform that we have developed in partnership with Airbus.

Our approach with Airbus involves a collaborative go-to-market

strategy to distribute the Foundry platform across the aviation industry.

Our approach with Airbus involves a collaborative go-to-market strategy to distribute the Foundry platform across the aviation industry.

The adoption of our software has been swift.

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The ruling requires the government to consider commercially available products, such as our software, before attempting to build its own.

See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operation — Overview — Our Customers”

for a discussion of the terms of our government contracts.

See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Our Customers” for a discussion of the terms of our government contracts.

Channel Sales & Cloud Partnerships

We are exploring the development of channel sales partnerships for specific industries and sectors by partnering closely with leading providers of public, private, and hybrid cloud services, which have relationships with essentially every major enterprise in the world and have large, existing sales forces.

We have entered into, and continue to explore the development of, channel sales partnerships for specific industries and sectors by partnering closely with leading providers of public, private, and hybrid cloud services, which have relationships with essentially every major enterprise in the world and have large, existing sales forces.

This channel emerged as an extension of the large computing requirements for our platforms and the migration towards the cloud as the hosting environment of choice for many customers.

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Joint Ventures & New Business Partnerships

We intend to continue to form joint ventures and new business partnerships, where we believe specific industries or sectors require a local partner and additional investment in order to realize the full potential of our platforms.

We intend to continue to form joint ventures and new business partnerships, where we believe specific industries or sectors require a partner and additional investment in order to realize the full potential of our platforms.

Account Growth

There are a number of sales and marketing strategies that we use to drive revenue growth at an account.

These strategies include (1) creating new ecosystem partnerships to extend the platform beyond the customer’s four walls into the operations of its partners and suppliers, (2) selling additional productized cross-industry software capabilities, and (3) selling strategic implementations of our software against specific use cases, which deliver competitive differentiation.

These strategies include (i) creating new ecosystem partnerships to extend the platform beyond the customer’s four walls into the operations of its partners and suppliers, (ii) selling additional productized cross-industry software capabilities, and (iii) selling strategic implementations of our software against specific use cases, which deliver competitive differentiation.

Our sales and marketing strategies allow us to scale existing customer contracts horizontally to include additional divisions or functions within a single institution and vertically to include additional users and user groups.

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By leveraging the tens of thousands of front-line hours across various industries and using emerging technologies, we can better anticipate customer needs and bring new use cases and new applications of existing services to our existing and potential customers.

Many of our current research and development efforts are focused on deploying software, models, and other critical assets at the edge.

This includes integrations with complex hardware, operations in disconnected environments, and more.

We have made, and will continue to make, significant investments in research and development to broaden our platform capabilities, strengthen our existing platforms and innovate.

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The same technology that makes Palantir so analytically powerful — its ability to construct a model of the real world from countless data points — is what allows our customers to monitor and control access to that data and its use.

As we build software to answer questions of increasing significance and complexity, we apply a set of principles at all stages of the development of our software and its deployment.

Systems must incorporate privacy from the beginning of the design process

Our goal has always been to eliminate the perceived trade-offs between privacy and utility.

To do this, we treat privacy as a fundamental concern at every stage of the engineering process.

Decisions that can affect individuals’ rights and liberties cannot be left solely to computers

As we build and implement technology to answer questions of increasing significance and complexity, we follow a set of principles that help us ensure we are doing so responsibly.

• Systems should incorporate principles of “privacy by design.” Our goal has always been to eliminate the perceived trade-offs between privacy and utility.

To do so, we treat privacy as a first-order concern at every stage of the engineering process and build privacy features as core capabilities in our platforms, seamlessly integrated with analytical and collaboration tools.

• Decisions that can affect individuals’ rights to freedom, opportunity, and happiness cannot be left solely to computers.

Our customers are using data to inform decisions with significant implications for individuals.

Rather than relying on algorithms that inhibit accountability, our software empowers humans to make informed decisions.

Rather than relying on algorithms that inhibit accountability and redress, we build in means for humans to make necessary judgment calls based on their context and intuition.

• Systems must facilitate accountability and oversight.

Effective privacy protection entails multi-layered, overlapping policies and procedures to reassure the protection of fundamental rights.

We design our platforms to support these policies with mechanisms that control usage, alert users to data handling requirements, and generate information for those responsible for oversight.

• Technology is not the answer to every problem.

Some decisions carry implications that are too complex or significant to be automated.

We strive to understand major world problems and think critically about whether it’s possible to build complementary solutions in an ethically responsible way.

Some decisions carry implications that are too complex or significant to be automated or streamlined, even with a human in the loop.

We strive to contextualize major world problems and think critically about whether it’s possible to engineer complementary solutions in an ethically responsible way.

When the answer is no, we turn the opportunity down.

Privacy and civil liberties engineering is an evolving field, and every organization is subject to unique requirements and concerns.

The ways in which these principles are realized will differ among products and organizations.

But the end goal should be the same:

developing and implementing technology with a full understanding of its potential effects on fundamental rights and incorporating technical capabilities that can support responsible data handling policies.

Customer Impact

Some examples of the ways in which our software facilitates data protection at our customers follow below.

Our platforms provide a secure, privacy-protective cloud-based data enclave to centralize data on COVID-19

for collaborative clinical research.

• Our platforms provide a secure, privacy-protective cloud-based data enclave to centralize data on COVID-19 for collaborative clinical research.

• Our platforms serve as the central analytics system of a major law enforcement agency in northern Europe.

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Our software provides inference tools to assist institutions in detecting the presence of such data so that they can flag and handle the data appropriately.

• Federation.

Federation allows users to search and analyze data from multiple, independent databases without duplicating and centralizing data in a single place.

Our platforms provide intelligent query interfaces that reduce the complexity of federation so that users can access the information they need without directly integrating the source into the platform.

Our platforms provide intelligent query interfaces that reduce the

complexity of federation so that users can access the information they need without directly integrating the source into the platform.

• Audit Logging and Analysis.

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Our platforms track the provenance and version history of all data in the system so that users can assess the reliability of the data and review and correct inaccuracies.

Providing users with well-curated, up-to-date

data reduces the risks of erroneous conclusions.

Providing users with well-curated, up-to-date data reduces the risks of erroneous conclusions.

• Data Retention and Deletion.

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larger and more mature intellectual property portfolios;

and substantially greater financial, technical, and other resources to provide support, to make acquisitions, and to develop and introduce new products.

and substantially greater financial, technical, and other resources to provide services, to make acquisitions, and to develop and introduce new products and capabilities.

Intellectual Property

We believe that our intellectual property rights are valuable and important to our business.

We rely on a combination of patents, copyrights, trademarks, trade secrets, know-how,

contractual provisions, and confidentiality procedures to protect our intellectual property rights.

We rely on a combination of patents, copyrights, trademarks, trade secrets, know-how, contractual provisions, and confidentiality procedures to protect our intellectual property rights.

We seek to protect our proprietary inventions relevant to our business through patent protection in the United States and abroad;

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We generally experience seasonality in the timing of recognition of revenue as a result of the timing of the execution of our contracts and, to a lesser extent, the existence of certain acceptance criteria, as we have historically executed many of our contracts in the third and fourth quarters due to the fiscal year ends and procurement cycles of our customers and at times we may start work prior to finalizing such contracts.

See “ Risk Factors—Seasonality may cause fluctuations in our results of operations and position.

See “Risk Factors—Seasonality may cause fluctuations in our results of operations and financial position.”

Employees and Human Capital

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One avenue for employees to contribute their voices is through Affinity Groups:

resource groups that celebrate unique perspectives and backgrounds and help guide our Diversity, Equity & Inclusion (DEI) business initiatives.

employee-led resource groups that celebrate unique perspectives and backgrounds and help guide our Diversity, Equity & Inclusion (“DEI”) business initiatives.

We also conduct regular company-wide surveys to assess the sentiment toward our values and culture, and our employees’ well-being and overall health.

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Our website is https://www.palantir.com, our investor relations website is https://investors.palantir.com, our LinkedIn account is @Palantir Technologies and our Twitter account is @PalantirTech.

We have used, and intend to continue to use, our website, investor relations website, LinkedIn, and Twitter accounts as a means of disclosing material non-public

information and for complying with our disclosure obligations under Regulation FD.

The following filings are available through our investor relations website after we file them with the Securities and Exchange Commission (“SEC”):

Annual Report on Form 10-K,

Quarterly Reports on Form 10-Q,

current reports on Form 8-K,

and our Proxy Statement for our annual meeting of stockholders.

These filings are also available for download free of charge on our investor relations website.

We have used, and intend to continue to use, our website, investor relations website, LinkedIn, and Twitter accounts as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.

The following filings are available for download free of charge through our investor relations website after we file them with the Securities and Exchange Commission (“SEC”):

Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, current reports on Form 8-K, and our Proxy Statement for our Annual Meeting of Stockholders (“Proxy Statement”).

The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC.

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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-K

Item 1. Business