What changed in this filing

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Item 1. Financial Statements

2023-08-08 compared with 2023-05-09 · 165 added, 124 removed, 461 unchanged (39% of the section changed)

3 unchanged sentences

(in thousands, except per share amounts)

As of March 31, 2023 As of December 31, 2022

As of June 30,

2023 As of December 31,

Current assets:

2 unchanged sentences

Accounts receivable, net 375,756 258,346

Restricted cash 11,946 16,244

Prepaid expenses and other current assets 97,906 149,556

1 unchanged sentence

Property and equipment, net 54,097 69,170

Restricted cash, noncurrent 12,095 12,551

Operating lease right-of-use assets 199,661 200,240

17 unchanged sentences

Common stock, $ 0.001 par value:

20,000,000 Class A shares authorized as of March 31, 2023 and December 31, 2022;

2,013,044 and 1,995,414 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively;

2,700,000 Class B shares authorized as of March 31, 2023 and December 31, 2022;

103,681 and 102,656 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively;

and 1,005 Class F shares authorized, issued, and outstanding as of March 31, 2023 and December 31, 2022

20,000,000 Class A shares authorized as of June 30, 2023 and December 31, 2022;

2,045,404 and 1,995,414 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively;

2,700,000 Class B shares authorized as of June 30, 2023 and December 31, 2022;

103,571 and 102,656 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively;

and 1,005 Class F shares authorized, issued, and outstanding as of June 30, 2023 and December 31, 2022

Additional paid-in capital 8,773,043 8,427,998

9 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended March 31,

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

2023 2022 2023 2022

Revenue $ 533,317 $ 473,010 $ 1,058,503 $ 919,367

13 unchanged sentences

Net income (loss) 27,872 ( 179,329 ) 47,023 ( 280,708 )

Net income attributable to noncontrolling interests 2,349 —

Net income (loss) attributable to noncontrolling interests ( 255 ) — 2,094 —

Net income (loss) attributable to common stockholders $ 28,127 $ ( 179,329 ) $ 44,929 $ ( 280,708 )

7 unchanged sentences

(in thousands)

Three Months Ended March 31,

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

2023 2022 2023 2022

Net income (loss) $ 27,872 $ ( 179,329 ) $ 47,023 $ ( 280,708 )

1 unchanged sentence

Foreign currency translation adjustments 166 ( 2,630 ) 896 ( 4,325 )

Net unrealized gain on available-for-sale securities 285 —

Net unrealized loss on available-for-sale securities ( 1,057 ) — ( 772 ) —

Comprehensive income (loss) 26,981 ( 181,959 ) 47,147 ( 285,033 )

Comprehensive income attributable to noncontrolling interests 2,349 —

Comprehensive income (loss) attributable to noncontrolling interests ( 255 ) — 2,094 —

Comprehensive income (loss) attributable to common stockholders $ 27,236 $ ( 181,959 ) $ 45,053 $ ( 285,033 )

5 unchanged sentences

Shares Amount

Balance as of December 31, 2022 2,099,075 $ 2,099 $ 8,427,998 $ ( 5,333 ) $ ( 5,859,438 ) $ 2,565,326 $ 77,111 $ 2,642,437

Balance as of March 31, 2023 2,117,730 $ 2,117 $ 8,568,570 $ ( 4,318 ) $ ( 5,842,636 ) $ 2,723,733 $ 79,460 $ 2,803,193

Issuance of common stock from the exercise of stock options 19,062 19 90,330 — — 90,349 — 90,349

1 unchanged sentence

Stock-based compensation — — 114,156 — — 114,156 — 114,156

Other comprehensive loss — — — ( 891 ) — ( 891 ) — ( 891 )

Other, net — — — — — — 459 459

Net income — — — — 28,127 28,127 ( 255 ) 27,872

Balance as of June 30, 2023 2,149,980 $ 2,149 $ 8,773,043 $ ( 5,209 ) $ ( 5,814,509 ) $ 2,955,474 $ 79,664 $ 3,035,138

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

Shares Amount

Balance as of December 31, 2022 2,099,075 $ 2,099 $ 8,427,998 $ ( 5,333 ) $ ( 5,859,438 ) $ 2,565,326 $ 77,111 $ 2,642,437

Issuance of common stock from the exercise of stock options 24,443 24 116,249 — — 116,273 — 116,273

Issuance of common stock upon vesting of RSUs 26,462 26 ( 26 ) — — — — —

Stock-based compensation — — 228,822 — — 228,822 — 228,822

Other comprehensive income — — — 124 — 124 — 124

Other, net — — — — — — 459 459

Net income — — — — 44,929 44,929 2,094 47,023

Balance as of June 30, 2023 2,149,980 $ 2,149 $ 8,773,043 $ ( 5,209 ) $ ( 5,814,509 ) $ 2,955,474 $ 79,664 $ 3,035,138

Palantir Technologies Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands)

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

Shares Amount

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

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

Issuance of common stock from the exercise of stock options 4,780 5 20,311 — — 20,316

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

Stock-based compensation — — 145,721 — — 145,721

Other comprehensive loss — — — ( 2,630 ) — ( 2,630 )

Net loss — — — — ( 179,329 ) ( 179,329 )

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

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

Shares Amount

5 unchanged sentences

Net loss — — — — ( 280,708 ) ( 280,708 )

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

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

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities

5 unchanged sentences

Unrealized and realized (gain) loss from marketable securities, net 11,078 201,341

Noncash consideration ( 20,166 ) ( 4,600 )

Other operating activities ( 17,817 ) ( 623 )

24 unchanged sentences

Cash, cash equivalents, and restricted cash - end of period $ 1,074,025 $ 2,415,165

Supplemental disclosures of cash flow information

Cash paid for income taxes $ 4,992 $ 659

Cash paid for interest — 2

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

22 unchanged sentences

the collectability of contract consideration, including accounts receivable;

the useful lives of tangible and intangible assets;

the valuation of assets acquired and liabilities assumed from business combinations, including intangible assets and goodwill;

and the incremental borrowing rate for operating leases.

the useful lives of intangible assets;

and the valuation of assets acquired and liabilities assumed from business combinations, including intangible assets and goodwill.

Estimates and judgments are based on historical experience, forecasted events, and various other assumptions that management believes to be reasonable under the circumstances.

3 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, 2022, which was filed with the SEC on February 21, 2023.

There have been no significant changes to these policies during the three months ended March 31, 2023, except for the changes noted below.

There have been no significant changes to these policies during the six months ended June 30, 2023, except for the changes noted below.

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 March 31,

As of June 30,

Cash and cash equivalents $ 1,055,923 $ 2,358,393

Restricted cash 11,946 33,804

Restricted cash, noncurrent 12,095 29,222

Restricted cash included in prepaid expenses and other current assets 5,999 28,125

Restricted cash included in other assets 12,103 28,647

Total cash, cash equivalents, and restricted cash $ 1,074,025 $ 2,415,165

2 unchanged sentences

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.

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 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 Company’s assessment as of March 31, 2023 and December 31, 2022, the Company recorded an allowance for credit losses of $ 11.3 million and $ 10.1 million, respectively.

Based upon the Company’s assessment as of June 30, 2023 and December 31, 2022, the Company recorded an allowance for credit losses of $ 9.6 million and $ 10.1 million, respectively.

Debt Securities

6 unchanged sentences

treasury securities are included in cash and cash equivalents.

Interest income on debt securities classified as available-for-sale is included in other income (expense), net on the condensed consolidated statements of operations.

Non-marketable debt securities are recorded at their estimated fair value in other assets with changes in fair value recorded through accumulated other comprehensive loss, net on the condensed consolidated balance sheets.

Interest income on debt securities is included in other income (expense), net on the condensed consolidated statements of operations.

The majority of the Company’s available-for-sale securities are recorded at fair value each reporting period using quoted prices of similar instruments and are classified within Level 2 of the fair value hierarchy.

10 unchanged sentences

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 June 30, 2023 and December 31, 2022 were

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

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 March 31, 2023 and December 31, 2022 were $ 254.0 million and $ 258.3 million, respectively.

Customer I represented 13 % of total accounts receivable as of March 31, 2023 and no other customers represented more than 10% of total accounts receivable as of March 31, 2023.

$ 375.8 million and $ 258.3 million, respectively.

Customer I represented 19 % of total accounts receivable as of June 30, 2023 and no other customer represented more than 10% of total accounts receivable as of June 30, 2023.

No customer represented more than 10% of total accounts receivable as of December 31, 2022.

For the three months ended March 31, 2023, Customer K, which is in the government operating segment, represented 10 % of total revenue and no other customers represented more than 10% of total revenue for the same period.

For the three months ended March 31, 2022, no customer represented 10% or more of total revenue.

For the three and six months ended June 30, 2023, Customer K, which is in the government operating segment, represented 10 % of total revenue.

No other customer represented more than 10% of total revenue for the three and six months ended June 30, 2023.

For the three and six months ended June 30, 2022, 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 March 31, 2023 and December 31, 2022 the Company's contract liability balances were $ 427.9 million and $ 339.2 million, respectively.

Revenue of $ 192.4 million and $ 187.0 million was recognized during the three months ended March 31, 2023 and 2022, respectively, that was included in the contract liability balances as of December 31, 2022 and 2021, respectively.

As of June 30, 2023 and December 31, 2022, the Company's contract liability balances were $ 497.8 million and $ 339.2 million, respectively.

Revenue of $ 270.2 million and $ 299.2 million was recognized during the six months ended June 30, 2023 and 2022, respectively, that was included in the contract liability balances as of December 31, 2022 and 2021, respectively.

Remaining Performance Obligations

4 unchanged sentences

Cancelable contracted revenue, which includes customer deposits, is not considered a remaining performance obligation.

The Company’s remaining performance obligations were $ 936.0 million as of March 31, 2023, of which the Company expects to recognize approximately 57 % as revenue over the next 12 months, 36 % as revenue over the subsequent 13 to 36 months, and the remainder thereafter.

The Company’s remaining performance obligations were $ 967.6 million as of June 30, 2023, of which the Company expects to recognize approximately 58 % as revenue over the next 12 months, 36 % 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 March 31, 2023

As of June 30, 2023

Total Level 1 Level 2 Level 3

1 unchanged sentence

Money market funds $ 625,336 $ 625,336 $ — $ —

treasury securities 199,304 — 199,304 —

Certificates of deposit 938 — 938 —

Restricted cash, current and noncurrent:

Prepaid expenses and other current assets and other assets:

Certificates of deposit 10,378 — 10,378 —

10 unchanged sentences

Certificates of deposit 6,791 — 6,791 —

Restricted cash, current and noncurrent:

Prepaid expenses and other current assets and other assets:

Certificates of deposit 18,707 — 18,707 —

7 unchanged sentences

Debt Securities

As of March 31, 2023, debt securities consisted of the following (in thousands):

As of March 31, 2023

As of June 30, 2023, debt securities consisted of the following (in thousands):

As of June 30, 2023

Amortized Cost Unrealized Gains Unrealized Losses Fair Value

treasury securities $ 1,822,231 $ 304 $ ( 19 ) $ 1,822,516

treasury securities included in marketable securities $ 2,031,587 $ 145 $ ( 917 ) $ 2,030,815

Total debt securities $ 2,031,587 $ 145 $ ( 917 ) $ 2,030,815

Included in cash and cash equivalents $ 199,260 $ 44 $ — $ 199,304

Included in marketable securities $ 1,622,971 $ 260 $ ( 19 ) $ 1,623,212

The Company sold $ 694.6 million of debt securities during the three months ended March 31, 2023 and immediately reinvested such proceeds into additional debt securities.

The Company did not sell any debt securities during the three months ended June 30, 2023.

The Company sold $ 694.6 million of debt securities during the six months ended June 30, 2023 and immediately reinvested such proceeds into additional debt securities.

The realized gains and losses from those sales were immaterial.

No credit or non-credit losses related to debt securities were recorded as of March 31, 2023.

Available-for-sale debt securities of $ 369.8 million were in an unrealized loss position primarily due to unfavorable changes in interest rates subsequent to initial purchase.

None of the available-for-sale debt securities held as of March 31, 2023 were in a continuous unrealized loss position for greater than 12 months.

The decline in fair value below amortized cost basis was not considered other than temporary as it is more likely than not that the Company will hold the securities until maturity or a recovery of the cost basis, and no credit-related impairment losses were recorded as of March 31, 2023.

No credit or non-credit losses related to debt securities were recorded as of June 30, 2023.

As of June 30, 2023, available-for-sale debt securities of $ 1.1 billion were in an unrealized loss position primarily due to unfavorable changes in interest rates subsequent to initial purchase.

None of the available-for-sale debt securities held as of June 30, 2023 were in a continuous unrealized loss position for greater than 12 months.

All of the Company’s U.S.

3 unchanged sentences

Equity securities primarily consist of shares held in publicly-traded companies, which are recorded at fair market value each reporting period in marketable securities on the condensed consolidated balance sheets.

Additionally, we have accepted, and may continue to accept, securities as noncash compensation.

Additionally, we have accepted, and may continue to accept, securities as noncash consideration.

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

During the three months ended March 31, 2022, the Company recorded net unrealized losses of $ 51.9 million and realized losses of $ 10.9 million within other income (expense), net on the condensed consolidated statements of operations.

For the three months ended March 31, 2023 and 2022, net unrealized losses from publicly-traded equity securities held at the end of each period were $ 8.2 million and $ 58.4 million, respectively.

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.

For the three months ended June 30, 2023 and 2022, net unrealized losses from publicly-traded equity securities held at the end of each period were $ 0.6 million and $ 134.4 million, respectively.

For the six months ended June 30, 2023 and 2022, net unrealized losses from publicly-traded equity securities held at the end of each period were $ 7.0 million and $ 189.5 million, respectively.

Palantir Technologies Inc.

2 unchanged sentences

During the year ended December 31, 2022, the Company purchased shares for a total investment of $ 124.5 million.

No Investments were purchased under such Investment Agreements during the three months ended March 31, 2023.

No Investments were purchased under such Investment Agreements during the six months ended June 30, 2023.

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 (collectively, the “Strategic Commercial Contracts”).

1 unchanged sentence

The Company assesses the concurrent agreements under the noncash consideration paid or payable to a customer guidance within Accounting Standards Codification 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 Strategic Commercial Contracts with Investees or associated entities was $ 390.3 million as of March 31, 2023, which is inclusive of $ 43.7 million of contractual options.

As currently assessed, the total value of such Strategic Commercial Contracts with Investees or associated entities was $ 395.4 million as of June 30, 2023, which is inclusive of $ 43.7 million of contractual options.

The Company performs ongoing assessments of customers’ financial condition, including the consideration of such customers’ ability and intention to pay, and whether all or some portion of the value of such contracts continue to meet the criteria for revenue recognition, among other factors.

As of March 31, 2023, the cumulative amount of revenue recognized from Strategic Commercial Contracts was $ 200.1 million, of which $ 33.4 million of revenue was recognized during the three months ended March 31, 2023.

As of June 30, 2023, the cumulative amount of revenue recognized from Strategic Commercial Contracts was $ 219.4 million, of which $ 19.4 million and $ 52.8 million of revenue was recognized during the three and six months ended June 30, 2023, respectively.

Alternative Investments

During the year ended December 31, 2021, the Company purchased $ 50.9 million in 100 -ounce gold bars.

During the three months ended March 31, 2023, the Company sold all of its gold bars for total proceeds of $ 51.1 million and recorded an immaterial realized gain within other income (expense), net on the condensed consolidated statements of operations.

During the six months ended June 30, 2023, the Company sold all of its gold bars for total proceeds of $ 51.1 million and recorded an immaterial realized gain 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 March 31, 2023 As of December 31, 2022

As of June 30,

2023 As of December 31,

Leasehold improvements $ 83,074 $ 80,378

5 unchanged sentences

Total property and equipment, net $ 54,097 $ 69,170

Depreciation and amortization expense related to property and equipment, net was $ 5.9 million and $ 3.9 million for the three months ended March 31, 2023 and 2022, respectively.

Depreciation and amortization expense related to property and equipment, net was $ 6.0 million and $ 4.5 million for the three months ended June 30, 2023 and 2022, respectively, and $ 11.9 million and $ 8.4 million for the six months ended June 30, 2023 and 2022, respectively.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

As of March 31, 2023 As of December 31, 2022

As of June 30,

2023 As of December 31,

Accrued payroll and related expenses $ 68,052 $ 43,495

2 unchanged sentences

Total accrued liabilities $ 184,617 $ 172,715

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”).

As of March 31, 2023, the 2014 Credit Facility allows for the drawdown of up to $ 950.0 million to fund working capital and general corporate expenditures, which includes total revolving commitments of $ 500.0 million and a delayed draw term loan (“DDTL”) commitment of $ 450.0 million, each with a maturity date of March 31, 2027.

The DDTL commitment is available to draw upon through July 1, 2023.

As of June 30, 2023, the 2014 Credit Facility allowed for the drawdown of up to $ 950.0 million to fund working capital and general corporate expenditures, which includes total revolving commitments of $ 500.0 million and a delayed draw term loan (“DDTL”) commitment of $ 450.0 million, each with a maturity date of March 31, 2027.

The DDTL commitment was available to draw upon through July 1, 2023, on which date it expired undrawn.

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.

As of March 31, 2023, the Company had no outstanding debt balances and an aggregate of $ 950.0 million undrawn of revolving and DDTL commitments under the 2014 Credit Facility.

As of June 30, 2023, the Company had no outstanding debt balances and an aggregate of $ 950.0 million undrawn of revolving and 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 March 31, 2023.

The Company was in compliance with all covenants associated with the 2014 Credit Facility as of June 30, 2023.

Commitments and Contingencies

3 unchanged sentences

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 March 31, 2023, the Company satisfied $ 82.3 million of its $ 199.0 million commitment for contract year three ending September 30, 2023.

As of June 30, 2023, the Company satisfied $ 124.2 million of its $ 199.0 million commitment for contract year three ending September 30, 2023.

Litigation and Legal Proceedings

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

government regulation

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

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.

7 unchanged sentences

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

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

and seek unspecified damages and remedies under Sections 10(b), 20(a), and 20(A) of the Exchange Act and Sections 11 and 15 of the Securities Act.

The suits allege false and misleading statements about our business and prospects, and purport to allege claims under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Securities Act of 1933, as amended (the “Securities Act”), and seek unspecified damages and remedies under Sections 10(b), 20(a), and 20(A) of the Exchange Act and Sections 11 and 15 of the Securities Act.

These three actions subsequently were consolidated as Cupat v.

9 unchanged sentences

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 March 31, 2023, 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.

As of June 30, 2023, 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 $ 24.0 million and $ 28.8 million as of March 31, 2023 and December 31, 2022, respectively, which were fully collateralized.

The Company had irrevocable standby letters of credit and guarantees, including bank guarantees, outstanding in the amounts of $ 18.1 million and $ 28.8 million as of June 30, 2023 and December 31, 2022, 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 March 31, 2023, these letters of credit and guarantees had expiration dates through August 2031.

As of June 30, 2023, these letters of credit and guarantees had expiration dates through August 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 March 31, 2023 and December 31, 2022.

The Company has not recorded warranty expense or related accruals as of June 30, 2023 and December 31, 2022.

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.

4 unchanged sentences

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 March 31, 2023 and December 31, 2022.

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 Amended and Restated Bylaws and Amended and Restated Certificate of Incorporation.

As such, the Company has not recorded a liability for infringement costs as of June 30, 2023 and December 31, 2022.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

the fullest extent permitted under the law and the Company’s Amended and Restated Bylaws and Amended and Restated Certificate of Incorporation.

Stockholders' Equity

2 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 March 31, 2023.

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 March 31, 2023.

No dividends have been declared as of June 30, 2023.

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

As of March 31, 2023 As of December 31, 2022

As of June 30, 2023 As of December 31, 2022

Authorized Issued and Outstanding Authorized Issued and Outstanding

5 unchanged sentences

Stock Options

The following table summarizes stock option activity for the three months ended March 31, 2023 (in thousands, except per share amounts):

The following table summarizes stock option activity for the six months ended June 30, 2023 (in thousands, except per share amounts):

Options Outstanding Weighted-Average Exercise Price Per Share

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Options canceled and forfeited ( 1,336 ) 4.99

Balance as of March 31, 2023 320,685 $ 8.11 8.14 $ 583,293

Options vested and exercisable as of March 31, 2023 184,837 $ 5.92 7.30 $ 561,553

As of March 31, 2023, the total unrecognized stock-based compensation expense related to options outstanding was $ 686.5 million which is expected to be recognized over a weighted-average service period of seven years .

The following table summarizes the RSU activity for the three months ended March 31, 2023 (in thousands, except per share amounts):

Balance as of June 30, 2023 301,134 $ 8.33 8.01 $ 2,108,191

Options vested and exercisable as of June 30, 2023 172,000 $ 6.18 7.21 $ 1,573,350

As of June 30, 2023, the total unrecognized stock-based compensation expense related to options outstanding was $ 654.8 million, which is expected to be recognized over a weighted-average service period of seven years .

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The following table summarizes the RSU activity for the six months ended June 30, 2023 (in thousands, except per share amounts):

RSUs Outstanding Weighted Average Grant Date Fair Value per Share

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RSUs canceled ( 5,491 ) 10.66

RSUs unvested and outstanding as of March 31, 2023 117,059 $ 9.94

As of March 31, 2023, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $ 703.2 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

RSUs unvested and outstanding as of June 30, 2023 106,107 $ 9.85

As of June 30, 2023, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $ 624.7 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 March 31,

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

2023 2022 2023 2022

Cost of revenue $ 8,004 $ 11,211 $ 17,181 $ 22,888

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Total stock-based compensation expense $ 114,201 $ 145,769 $ 228,915 $ 295,092

The Company recorded a provision for income taxes of $ 1.7 million and $ 2.0 million for the three months ended March 31, 2023 and 2022, respectively.

The Company recorded a provision for income taxes of $ 2.2 million and $ 2.6 million for the three months ended June 30, 2023 and 2022, respectively, and a provision for income taxes of $ 3.9 million and $ 4.6 million for the six months ended June 30, 2023 and 2022, 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 March 31, 2023 differs from the U.S.

statutory rate primarily due to foreign income taxed at different rates, non-deductible stock-based compensation, and valuation allowances recorded on its deferred tax assets from the U.S., United Kingdom (“U.K.”), and other jurisdictions .

There was no material change in the provision for income taxes for the three months ended March 31, 2023 compared to the three months ended March 31, 2022.

The Company’s effective tax rate as of June 30, 2023 differs from the U.S.

statutory rate primarily due to foreign income taxed at different rates, non-deductible stock-based compensation, other non-deductible expenses, and valuation allowances recorded on its deferred tax assets from the U.S., United Kingdom (“U.K.”), and other jurisdictions .

There was no material change in the provision for income taxes for the three and six months ended June 30, 2023 compared to the same periods in 2022.

The realization of deferred tax assets is dependent upon the generation of sufficient taxable income of the appropriate character in future periods.

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

deferred tax assets as of March 31, 2023.

deferred tax assets as of June 30, 2023.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Net Earnings (Loss) Per Share Attributable to Common Stockholders

The following table presents the calculation of basic and diluted net earnings (loss) per share attributable to common stockholders (in thousands, except per share amounts):

Three Months Ended March 31,

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

2023 2022 2023 2022

Net income (loss) attributable to common stockholders for diluted net earnings (loss) per share $ 28,127 $ ( 179,329 ) $ 44,929 $ ( 280,708 )

Weighted-average shares used in computing net earnings (loss) per share, basic 2,107,780 2,036,307

Weighted-average shares used in computing net earnings (loss) per share, diluted 2,217,439 2,036,307

Weighted-average shares used in computing net earnings (loss) per share:

Basic 2,131,224 2,054,799 2,119,567 2,045,604

Effect of dilutive shares 146,931 — 132,638 —

Diluted 2,278,155 2,054,799 2,252,205 2,045,604

Net earnings (loss) per share

Net earnings (loss) per share attributable to common stockholders, basic $ 0.01 $ ( 0.05 )

Net earnings (loss) per share attributable to common stockholders, diluted $ 0.01 $ ( 0.05 )

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Net earnings (loss) per share attributable to common stockholders:

Basic $ 0.01 $ ( 0.09 ) $ 0.02 $ ( 0.14 )

Diluted $ 0.01 $ ( 0.09 ) $ 0.02 $ ( 0.14 )

The following outstanding potentially dilutive common stock equivalents have been excluded from the computation of diluted net earnings (loss) per share attributable to common stockholders for the periods presented due to their anti-dilutive effect (in thousands):

As of March 31,

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

2023 2022 2023 2022

Options issued and outstanding 162,000 336,576 162,000 336,576

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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 March 31,

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

2023 2022 2023 2022

Government $ 301,505 $ 262,998 $ 590,575 $ 504,788

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Total revenue $ 533,317 $ 473,010 $ 1,058,503 $ 919,367

Three Months Ended March 31,

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

2023 2022 2023 2022

Contribution:

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

Three Months Ended March 31,

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

2023 2022 2023 2022

Income (loss) from operations $ 10,074 $ ( 41,745 ) $ 14,189 $ ( 81,184 )

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(1) Excludes stock-based compensation expense.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Geographic Information

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

Three Months Ended March 31,

Amount % Amount %

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

2023 2022 2023 2022

Amount % Amount % Amount % Amount %

United States $ 328,012 62 % $ 290,223 61 % $ 664,857 63 % $ 563,136 61 %

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Total revenue $ 533,317 100 % $ 473,010 100 % $ 1,058,503 100 % $ 919,367 100 %

(1) No other country represents 10 % or more of total revenue for the three months ended March 31, 2023 or 2022.

(1) No other country represents 10 % or more of total revenue for the three and six months ended June 30, 2023 or 2022.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Intangible Assets

Intangible assets subject to amortization that are not fully amortized are as follows (in thousands):

Weighted average useful life As of March 31, 2023 As of December 31, 2022

Weighted average useful life As of June 30, 2023 As of December 31, 2022

Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

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Total intangible assets $ 38,943 $ ( 8,222 ) $ 30,721 $ 40,436 $ ( 4,897 ) $ 35,539

Amortization expense of intangible assets was not material for the three months ended March 31, 2023 or 2022.

As of March 31, 2023, expected amortization expense for the unamortized finite-lived intangible assets is as follows (in thousands):

Amortization expense of intangible assets was not material for the three and six months ended June 30, 2023 or 2022.

As of June 30, 2023, expected amortization expense for the unamortized finite-lived intangible assets is as follows (in thousands):

Year ended December 31, Amount

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Total $ 30,721

Subsequent Events

In August 2023, our Board of Directors authorized a stock repurchase program of up to $ 1.0 billion of our outstanding shares of Class A common stock (the “Share Repurchase Program”).

We may repurchase shares of Class A common stock from time to time through open market purchases, in privately negotiated transactions or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions.

The timing and the amount of stock repurchases in the Share Repurchase Program will be determined by Palantir’s management, based on its evaluation of factors including business and market conditions, corporate and regulatory requirements, and other considerations.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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• 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 expectations regarding the effects of existing and developing laws and regulations, including with respect to taxation, privacy, data protection, cybersecurity, and artificial intelligence (“AI”);

• our expectations regarding new and evolving markets, such as AI;

• our ability to develop and protect our brand;

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• our ability to maintain, protect, and enhance our intellectual property;

• our expectations regarding the amount, timing and manner of any stock repurchases;

• our expectations regarding our multi-class stock and governance structure and the benefits thereof;

• our expectations regarding macroeconomic conditions, including rising inflation and interest rates, monetary policy changes, or financial services sector instability;

• the impacts of the ongoing coronavirus (“COVID-19”) pandemic and the ongoing Russia-Ukraine conflict, including on our and our customers’, vendors’, and partners’ respective businesses and the markets in which we and our customers, vendors, and partners operate;

• the impacts of the coronavirus (“COVID-19”) pandemic and the ongoing Russia-Ukraine conflict, including on our and our customers’, vendors’, and partners’ respective businesses and the markets in which we and our customers, vendors, and partners operate;

• the impacts of the volatility and fluctuations in currency exchange rates, including an increase in the strength of the United States (“U.S.”) dollar, on the costs of our products outside of the United States and on customer demand;

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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-Q

Item 1. Financial Statements