What changed in this filing

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Item 1. Financial Statements

2023-11-03 compared with 2023-08-08 · 129 added, 107 removed, 519 unchanged (31% of the section changed)

3 unchanged sentences

(in thousands, except per share amounts)

As of June 30,

2023 As of December 31,

As of September 30, As of December 31,

Current assets:

24 unchanged sentences

Common stock, $ 0.001 par value:

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

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

2,068,689 and 1,995,414 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively;

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

105,547 and 102,656 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively;

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

Additional paid-in capital 8,938,050 8,427,998

9 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,

2023 2022 2023 2022

14 unchanged sentences

Net income (loss) 73,439 ( 123,875 ) 120,462 ( 404,583 )

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

Net income attributable to noncontrolling interests 1,934 — 4,028 —

Net income (loss) attributable to common stockholders $ 71,505 $ ( 123,875 ) $ 116,434 $ ( 404,583 )

2 unchanged sentences

Weighted-average shares of common stock outstanding used in computing net earnings (loss) per share attributable to common stockholders, basic

2,162,530 2,073,265 2,134,045 2,054,926

Weighted-average shares of common stock outstanding used in computing net earnings (loss) per share attributable to common stockholders, diluted

2,325,600 2,073,265 2,281,347 2,054,926

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

2 unchanged sentences

(in thousands)

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

2 unchanged sentences

Foreign currency translation adjustments ( 2,164 ) ( 3,161 ) ( 1,268 ) ( 7,486 )

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

Net unrealized gain (loss) on available-for-sale securities 168 — ( 604 ) —

Comprehensive income (loss) 71,443 ( 127,036 ) 118,590 ( 412,069 )

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

Comprehensive income attributable to noncontrolling interests 1,934 — 4,028 —

Comprehensive income (loss) attributable to common stockholders $ 69,509 $ ( 127,036 ) $ 114,562 $ ( 412,069 )

5 unchanged sentences

Shares Amount

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

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

Issuance of common stock from the exercise of stock options 10,889 11 50,545 — — 50,556 — 50,556

4 unchanged sentences

Net income — — — — 71,505 71,505 1,934 73,439

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

Balance as of September 30, 2023 2,175,241 $ 2,174 $ 8,938,050 $ ( 7,205 ) $ ( 5,743,004 ) $ 3,190,015 $ 81,882 $ 3,271,897

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

4 unchanged sentences

Stock-based compensation — — 343,298 — — 343,298 — 343,298

Other comprehensive income — — — 124 — 124 — 124

Other comprehensive loss — — — ( 1,872 ) — ( 1,872 ) — ( 1,872 )

Other, net — — — — — — 743 743

Net income — — — — 116,434 116,434 4,028 120,462

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

Balance as of September 30, 2023 2,175,241 $ 2,174 $ 8,938,050 $ ( 7,205 ) $ ( 5,743,004 ) $ 3,190,015 $ 81,882 $ 3,271,897

Palantir Technologies Inc.

3 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

3 unchanged sentences

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

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

29 unchanged sentences

Effect of foreign exchange on cash, cash equivalents, and restricted cash ( 2,113 ) ( 12,470 )

Net decrease in cash, cash equivalents, and restricted cash ( 1,553,310 ) 48,251

Net increase (decrease) in cash, cash equivalents, and restricted cash ( 1,565,449 ) 85,835

Cash, cash equivalents, and restricted cash - beginning of period 2,627,335 2,366,914

31 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 six months ended June 30, 2023, except for the changes noted below.

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

As of September 30,

Cash and cash equivalents $ 1,040,310 $ 2,411,290

5 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 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, 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 June 30, 2023 and December 31, 2022, the Company recorded an allowance for credit losses of $ 9.6 million and $ 10.1 million, respectively.

Based upon the Company’s assessment as of September 30, 2023 and December 31, 2022, the Company recorded an allowance for credit losses of $ 10.5 million and $ 10.1 million, respectively.

Debt Securities

20 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, 2023 and December 31, 2022 were

The Company’s accounts receivable balances as of September 30, 2023 and December 31, 2022

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

$ 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.

were $ 430.3 million and $ 258.3 million, respectively.

Customer J and Customer I represented 22 % and 12 %, respectively, of total accounts receivable as of September 30, 2023 and no other customer represented more than 10% of total accounts receivable as of September 30, 2023.

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

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.

For the three and nine months ended September 30, 2023 and 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 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.

As of September 30, 2023 and December 31, 2022, the Company's contract liability balances were $ 489.6 million and $ 339.2 million, respectively.

Revenue of $ 314.9 million and $ 353.8 million was recognized during the nine months ended September 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 $ 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.

The Company’s remaining performance obligations were $ 987.7 million as of September 30, 2023, of which the Company expects to recognize approximately 57 % as revenue over the next 12 months, 35 % 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, 2023

As of September 30, 2023

Total Level 1 Level 2 Level 3

1 unchanged sentence

Money market funds $ 599,605 $ 599,605 $ — $ —

treasury securities 141,946 — 141,946 —

Certificates of deposit 938 — 938 —

22 unchanged sentences

Debt Securities

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

As of June 30, 2023

As of September 30, 2023, available-for-sale debt securities consisted of the following (in thousands):

As of September 30, 2023

Amortized Cost Unrealized Gains Unrealized Losses Fair Value

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

treasury securities $ 2,375,747 $ 123 $ ( 726 ) $ 2,375,144

Total debt securities $ 2,375,747 $ 123 $ ( 726 ) $ 2,375,144

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.

Included in cash and cash equivalents $ 141,925 $ 21 $ — $ 141,946

Included in marketable securities $ 2,233,822 $ 102 $ ( 726 ) $ 2,233,198

The Company did not sell any available-for-sale debt securities during the three months ended September 30, 2023.

The Company sold $ 694.6 million of available-for-sale debt securities during the nine months ended September 30, 2023 and immediately reinvested such proceeds into additional available-for-sale 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 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.

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 June 30, 2023.

No credit or non-credit losses related to available-for sale debt securities were recorded as of September 30, 2023.

As of September 30, 2023, available-for-sale debt securities of $ 1.4 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 September 30, 2023 were in a continuous unrealized loss position for greater than 12 months.

All of the Company’s U.S.

4 unchanged sentences

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

Total equity securities received as noncash consideration was $ 17.3 million and $ 6.4 million during the nine months ended September 30, 2023 and 2022, respectively.

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.

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.

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.

For the three months ended September 30, 2023 and 2022, net unrealized

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

losses from publicly-traded equity securities held at the end of each period were $ 0.7 million and $ 57.2 million, respectively.

For the nine months ended September 30, 2023 and 2022, net unrealized losses from publicly-traded equity securities held at the end of each period were $ 5.6 million and $ 223.4 million, respectively.

From 2021 through 2022, the Company 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 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 six months ended June 30, 2023.

No Investments were purchased under such Investment Agreements during the nine months ended September 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”).

The terms of such contracts, including contractual options, range from two to seven years and are subject to termination for cause provisions.

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 $ 395.4 million as of June 30, 2023, which is inclusive of $ 43.7 million of contractual options.

As currently assessed, the total value of Strategic Commercial Contracts was $ 392.1 million as of September 30, 2023, which is inclusive of $ 43.7 million of contractual options.

The original terms of Strategic Commercial Contracts with remaining deal value as of September 30, 2023, including contractual options, range from two to seven years and are subject to termination for cause provisions.

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 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.

As of September 30, 2023, the cumulative amount of revenue recognized from Strategic Commercial Contracts was $ 234.1 million, of which $ 14.7 million and $ 67.4 million of revenue was recognized during the three and nine months ended September 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 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.

During the nine months ended September 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 June 30,

As of September 30,

2023 As of December 31,

6 unchanged sentences

Total property and equipment, net $ 50,133 $ 69,170

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.

Depreciation and amortization expense related to property and equipment, net was $ 6.3 million and $ 5.5 million for the three months ended September 30, 2023 and 2022, respectively, and $ 18.2 million and $ 13.9 million for the nine months ended September 30, 2023 and 2022, respectively.

Palantir Technologies Inc.

2 unchanged sentences

Accrued liabilities consisted of the following (in thousands):

As of June 30,

As of September 30,

2023 As of December 31,

5 unchanged sentences

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 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.

As of September 30, 2023, the Company had no outstanding debt balances, and undrawn revolving commitments of $ 500.0 million available to fund working capital and general corporate expenditures under the 2014 Credit Facility, which has a maturity date of March 31, 2027.

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.

The Company incurs a commitment fee of 0.30 % assessed on the daily average undrawn portion of revolving and DDTL commitments.

The Company incurs a commitment fee of 0.30 % assessed on the daily average undrawn portion of revolving commitments.

Applicable interest and commitment fees are payable quarterly or more or less frequently in certain circumstances.

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 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 June 30, 2023.

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

Commitments and Contingencies

Purchase Commitments

In December 2019, the Company entered into, and subsequently amended, a minimum annual commitment to purchase cloud hosting services of at least $ 1.49 billion over six contract years, with an optional carryover period through September 30, 2029, in exchange for various discounts on such services.

If the spend does not meet the minimum annual commitment each year or at the end of the term, the Company is obligated to make a return payment.

If the difference is greater than $ 30.0 million for each of the first three contract years or $ 50.0 million for each of the contract years thereafter (“relief amounts”), the Company has the option to pay the respective relief amount for that year for services to be utilized in the future and the excess amount of the difference above the relief amount would be added to the minimum annual commitment of the following year through the end of the contract.

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

In September 2023, the Company amended one of its third-party cloud hosting services agreements.

Under this amendment, the Company has a commitment to spend at least $ 1.95 billion over ten contract years through September 30, 2033, as well as certain additional minimum usage commitments, among other things.

Any and all previous payment obligations related to such third-party cloud hosting services agreement were terminated concurrently with the signing of this amendment.

The commitment amount for the contract year beginning October 1, 2023 and ending September 30, 2024 is $ 154.0 million.

Litigation and Legal Proceedings

13 unchanged sentences

intellectual property;

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);

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

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.

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

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

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

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

10 unchanged sentences

1:23-cv-00103-MN, each against certain current and former officers and directors asserting breach of fiduciary duty and related claims relating to the allegations of the securities class action complaints and seek unspecified damages and injunctive remedies under Section 14(a) of the Exchange Act and Delaware law.

On August 22, 2023, a stockholder derivative action was filed in the Court of Chancery of the State of Delaware captioned Central Laborers’ Pension Fund v.

2023-0864 against certain current and former officers and directors asserting breach of fiduciary duty and related claims relating to the allegations of the securities class action complaints and seek unspecified damages and injunctive relief under Delaware law.

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 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.

As of September 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 $ 18.1 million and $ 28.8 million as of June 30, 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 $ 21.6 million and $ 28.8 million as of September 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 June 30, 2023, these letters of credit and guarantees had expiration dates through August 2031.

As of September 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 June 30, 2023 and December 31, 2022.

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

As such, the Company has not recorded a liability for infringement costs as of September 30, 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.

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

3 unchanged sentences

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

The Class F common stock generally gives the Founders the ability to control up to 49.999999 % of the total voting power of the Company's capital stock, so long as the Founders and certain of their affiliates collectively meet a minimum ownership threshold, which was 100.0 million of the Company's equity securities as of June 30, 2023.

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, 2023.

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

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

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

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

Authorized Issued and Outstanding Authorized Issued and Outstanding

3 unchanged sentences

Total 22,701,005 2,175,241 22,701,005 2,099,075

Share Repurchase Program

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

The Company may repurchase shares of its 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 Exchange Act in accordance with applicable securities laws and other restrictions.

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

The Share Repurchase Program does not obligate the Company to repurchase any specific number of shares and may be discontinued at any time.

During the three months ended September 30, 2023, the Company did not repurchase any shares of its Class A common stock under the Share Repurchase Program.

Stock-Based Compensation

Stock Options

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

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

Options Outstanding Weighted-Average Exercise Price Per Share

4 unchanged sentences

Options canceled and forfeited ( 1,844 ) 5.18

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 .

Balance as of September 30, 2023 289,737 $ 8.47 7.82 $ 2,181,036

Options vested and exercisable as of September 30, 2023 166,761 $ 6.41 7.07 $ 1,598,629

As of September 30, 2023, the total unrecognized stock-based compensation expense related to options outstanding was $ 625.7 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):

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

RSUs Outstanding Weighted Average Grant Date Fair Value per Share

3 unchanged sentences

RSUs canceled ( 7,580 ) 10.60

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 .

RSUs unvested and outstanding as of September 30, 2023 92,613 $ 10.11

As of September 30, 2023, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $ 565.1 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,

2023 2022 2023 2022

4 unchanged sentences

Total stock-based compensation expense $ 114,380 $ 140,308 $ 343,295 $ 435,400

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 recorded a provision for income taxes of $ 6.5 million and $ 1.1 million for the three months ended September 30, 2023 and 2022, respectively, and a provision for income taxes of $ 10.4 million and $ 5.7 million for the nine months ended September 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 June 30, 2023 differs from the U.S.

The Company’s effective tax rate as of September 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 provision for income taxes increased by $ 5.4 million and $ 4.7 million for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022 primarily related to higher foreign income taxes as the result of higher foreign taxable income and higher withholding taxes in the current year.

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

5 unchanged sentences

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

deferred tax assets as of June 30, 2023.

deferred tax assets as of September 30, 2023.

Palantir Technologies Inc.

2 unchanged sentences

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 June 30, Six Months Ended June 30,

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

9 unchanged sentences

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):

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

13 unchanged sentences

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,

2023 2022 2023 2022

2 unchanged sentences

Total revenue $ 558,159 $ 477,880 $ 1,616,662 $ 1,397,247

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

4 unchanged sentences

The reconciliation of contribution to income (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,

2023 2022 2023 2022

10 unchanged sentences

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,

2023 2022 2023 2022

5 unchanged sentences

Total revenue $ 558,159 100 % $ 477,880 100 % $ 1,616,662 100 % $ 1,397,247 100 %

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

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

Intangible Assets

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 June 30, 2023 As of December 31, 2022

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

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

4 unchanged sentences

Total intangible assets $ 38,943 $ ( 10,631 ) $ 28,312 $ 40,436 $ ( 4,897 ) $ 35,539

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):

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

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

Year ended December 31, Amount

2 unchanged sentences

Total $ 28,312

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

27 unchanged sentences

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

• 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 coronavirus (“COVID-19”) pandemic, the ongoing Russia-Ukraine conflict, and Hamas’ recent attack against Israel and ensuing conflicts, 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;

16 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