What changed in this filing

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Item 1. Financial Statements

2024-08-06 compared with 2024-05-07 · 159 added, 121 removed, 511 unchanged (35% of the section changed)

3 unchanged sentences

(in thousands, except per share amounts)

As of March 31, 2024 As of December 31, 2023

As of June 30, 2024 As of December 31, 2023

Current assets:

24 unchanged sentences

Common stock, $ 0.001 par value:

20,000,000 Class A shares authorized as of March 31, 2024 and December 31, 2023;

2,130,393 and 2,096,982 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively;

2,700,000 Class B shares authorized as of March 31, 2024 and December 31, 2023;

95,565 and 102,141 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively;

and 1,005 Class F shares authorized, issued, and outstanding as of March 31, 2024 and December 31, 2023

20,000,000 Class A shares authorized as of June 30, 2024 and December 31, 2023;

2,140,809 and 2,096,982 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively;

2,700,000 Class B shares authorized as of June 30, 2024 and December 31, 2023;

96,125 and 102,141 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively;

and 1,005 Class F shares authorized, issued, and outstanding as of June 30, 2024 and December 31, 2023

Additional paid-in capital 9,463,178 9,122,173

9 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended March 31,

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

2024 2023 2024 2023

Revenue $ 678,134 $ 533,317 $ 1,312,472 $ 1,058,503

12 unchanged sentences

Net income 135,570 27,872 241,641 47,023

Net income attributable to noncontrolling interests 541 2,349

Net income (loss) attributable to noncontrolling interests 1,444 ( 255 ) 1,985 2,094

Net income attributable to common stockholders $ 134,126 $ 28,127 $ 239,656 $ 44,929

7 unchanged sentences

(in thousands)

Three Months Ended March 31,

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

2024 2023 2024 2023

Net income $ 135,570 $ 27,872 $ 241,641 $ 47,023

1 unchanged sentence

Foreign currency translation adjustments 731 166 ( 1,168 ) 896

Net unrealized gain (loss) on available-for-sale securities ( 4,622 ) 285

Net unrealized loss on available-for-sale securities

( 53 ) ( 1,057 ) ( 4,675 ) ( 772 )

Comprehensive income

Comprehensive income attributable to noncontrolling interests 541 2,349

136,248 26,981 235,798 47,147

Comprehensive income (loss) attributable to noncontrolling interests 1,337 ( 255 ) 1,878 2,094

Comprehensive income attributable to common stockholders $ 134,911 $ 27,236 $ 233,920 $ 45,053

3 unchanged sentences

(in thousands)

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

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, 2023 2,200,128 $ 2,200 $ 9,122,173 $ 801 $ ( 5,649,613 ) $ 3,475,561 $ 85,404 $ 3,560,965

Balance as of March 31, 2024 2,226,963 $ 2,227 $ 9,322,803 $ ( 5,720 ) $ ( 5,544,083 ) $ 3,775,227 $ 85,945 $ 3,861,172

Issuance of common stock from the exercise of stock options 3,394 4 16,026 — — 16,030 — 16,030

Issuance of common stock upon release of restricted stock units (“RSUs”) and performance-based RSUs (“P-RSUs”) 8,369 8 ( 8 ) — — — — —

Repurchases of common stock ( 787 ) ( 1 ) ( 17,698 ) — — ( 17,699 ) — ( 17,699 )

Stock-based compensation — — 142,055 — — 142,055 — 142,055

Other comprehensive income (loss) — — — 785 — 785 ( 107 ) 678

Net income — — — — 134,126 134,126 1,444 135,570

Balance as of June 30, 2024 2,237,939 $ 2,238 $ 9,463,178 $ ( 4,935 ) $ ( 5,409,957 ) $ 4,050,524 $ 87,282 $ 4,137,806

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

Shares Amount

Balance as of December 31, 2023 2,200,128 $ 2,200 $ 9,122,173 $ 801 $ ( 5,649,613 ) $ 3,475,561 $ 85,404 $ 3,560,965

Issuance of common stock from the exercise of stock options 20,876 21 99,849 — — 99,870 — 99,870

Issuance of common stock upon release of RSUs and P-RSUs 18,090 18 ( 18 ) — — — — —

Repurchases of common stock ( 1,155 ) ( 1 ) ( 26,698 ) — — ( 26,699 ) — ( 26,699 )

Other comprehensive income — — — ( 6,521 ) — ( 6,521 ) — ( 6,521 )

Stock-based compensation — — 267,872 — — 267,872 — 267,872

Other comprehensive loss — — — ( 5,736 ) — ( 5,736 ) ( 107 ) ( 5,843 )

Net income — — — — 239,656 239,656 1,985 241,641

Balance as of June 30, 2024 2,237,939 $ 2,238 $ 9,463,178 $ ( 4,935 ) $ ( 5,409,957 ) $ 4,050,524 $ 87,282 $ 4,137,806

Palantir Technologies Inc.

Condensed Consolidated Statements of Equity

(in thousands)

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 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

Issuance of common stock upon vesting of RSUs 13,188 13 ( 13 ) — — — — —

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

5 unchanged sentences

Other comprehensive loss — — — 124 — 124 — 124

Other, net — — — — — — 459 459

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

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

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

23 unchanged sentences

Proceeds from sales of alternative investments — 51,072

Other investing activities ( 4,000 ) —

Net cash used in investing activities ( 660,123 ) ( 1,945,690 )

5 unchanged sentences

Effect of foreign exchange on cash, cash equivalents, and restricted cash ( 4,948 ) ( 1,855 )

Net decrease in cash, cash equivalents, and restricted cash ( 310,442 ) ( 1,338,556 )

Net increase (decrease) in cash, cash equivalents, and restricted cash ( 318,032 ) ( 1,553,310 )

Cash, cash equivalents, and restricted cash - beginning of period 850,107 2,627,335

27 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, 2023, which was filed with the SEC on February 20, 2024.

There have been no significant changes to these policies during the three months ended March 31, 2024, except for the changes noted below.

There have been no significant changes to these policies during the six months ended June 30, 2024, except for the changes noted below.

Cash, Cash Equivalents, and Restricted Cash

1 unchanged sentence

Cash equivalents primarily consist of amounts invested in money market funds and available-for-sale debt securities.

Restricted cash primarily consists of cash and certificates of deposit that are held as collateral against letters of credit and guarantees that the Company is required to maintain for operating lease agreements, certain customer contracts, and other guarantees and financing arrangements.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

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 $ 512,659 $ 1,055,923

7 unchanged sentences

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, 2024 and December 31, 2023, the Company recorded an allowance for credit losses of $ 8.5 million and $ 10.5 million, respectively.

Based upon the Company’s assessment as of June 30, 2024 and December 31, 2023, the Company recorded an allowance for credit losses of $ 2.8 million and $ 10.5 million, respectively.

Concentrations of Credit Risk

6 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 March 31, 2024 and December 31, 2023 were $ 487.0 million and $ 364.8 million, respectively.

Customer I represented 22 % of total accounts receivable as of March 31, 2024.

Customer I represented 15 % of total accounts receivable as of December 31, 2023.

No other customer represented more than 10% of total accounts receivable as of March 31, 2024 and December 31, 2023.

For the three months ended March 31, 2024, no customer represented more than 10% of total revenue.

For the three months ended March 31, 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 months ended March 31, 2023.

The Company’s accounts receivable balances as of June 30, 2024 and December 31, 2023 were $ 659.3 million and $ 364.8 million, respectively.

Customer I represented 32 % and 15 % of total accounts receivable as of June 30, 2024 and December 31, 2023, respectively, and no other customer represented more than 10% of total accounts receivable as of June 30, 2024 or December 31, 2023.

For the three and six months ended June 30, 2024, no customer represented more than 10% 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.

Share Repurchase Program

5 unchanged sentences

The Company recognizes forfeitures as they occur.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Service-Based Vesting

The Company grants RSUs and stock option awards that vest based upon the satisfaction of only a service condition.

The Company determines the grant-date fair value of the RSUs as the fair value of the Company’s common stock on the grant date.

The Company records stock-based compensation expense for stock options and RSUs that vest based upon the satisfaction of only a service condition on a straight-line basis over the requisite service period, which is generally one to four years .

The Company determines the grant-date fair value of the RSUs based on the fair value of the Company’s common stock on the grant date.

The Company records stock-based compensation expense for stock options and RSUs that vest based upon the

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

satisfaction of only a service condition on a straight-line basis over the requisite service period, which is generally up to four years .

For stock option awards, the Company uses the Black-Scholes option pricing model to determine the fair value of the stock options granted.

4 unchanged sentences

The Company also grants awards, including RSUs, that vest upon the satisfaction of both a service condition and a performance condition.

The Company determines the grant-date fair value of RSUs with both a service-based vesting condition and a performance-based vesting condition as the fair value of the Company’s common stock on the grant date and records stock-based compensation expense using the accelerated attribution method over the service period.

The Company determines the grant-date fair value of RSUs with both a service-based vesting condition and a performance-based vesting condition based on the fair value of the Company’s common stock on the grant date and records stock-based compensation expense using the accelerated attribution method over the service period.

The performance-based vesting condition for the RSUs granted prior to September 30, 2020, the date the Company completed a direct listing of its Class A common stock on the New York Stock Exchange (the “Direct Listing”) was satisfied upon the occurrence of the Company’s Direct Listing.

For P-RSUs granted after the Direct Listing, the Company recognizes expense from the number of P-RSUs expected to vest, determined based on the level of achievement against certain performance conditions, over the requisite service period when it is probable that the performance condition will be achieved.

For P-RSUs granted after the Direct Listing, the Company recognizes expense for the number of P-RSUs expected to vest, determined based on the level of achievement against certain performance conditions, over the requisite service period when it is probable that the performance condition will be achieved.

Market-Based Vesting

The Company grants awards, including stock appreciation rights (“SARs”), that vest upon the satisfaction of market-based vesting conditions.

The Company estimates the fair value of the awards granted and the corresponding derived service period using the Monte Carlo simulation model, which requires the use of various assumptions including the contractual term, expected stock price volatility, risk-free interest rate, suboptimal exercise factor, annual post-vest termination rate, and cost of capital as of the grant date.

The Company estimates the fair value of the awards granted and the corresponding derived service period using a Monte Carlo simulation model, which requires the use of various assumptions including the contractual term, expected stock price volatility, risk-free interest rate, suboptimal exercise factor, annual post-vest termination rate, and cost of capital as of the grant date.

Stock-based compensation expense for these awards is recognized straight-line over the estimated derived service period.

4 unchanged sentences

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

As of March 31, 2024 and December 31, 2023 the Company's contract liability balances were $ 477.2 million and $ 486.3 million, respectively.

Revenue of $ 244.3 million and $ 192.4 million was recognized during the three months ended March 31, 2024 and 2023, respectively, that was included in the contract liability balances as of December 31, 2023 and 2022, respectively.

As of June 30, 2024 and December 31, 2023, the Company's contract liability balances were $ 517.1 million and $ 486.3 million, respectively.

Revenue of $ 362.4 million and $ 270.2 million was recognized during the six months ended June 30, 2024 and 2023, respectively, that was included in the contract liability balances as of December 31, 2023 and 2022, 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 $ 1.3 billion as of March 31, 2024, of which the Company expects to recognize approximately 53 % as revenue over the next 12 months, 38 % as revenue over the subsequent 13 to 36 months, and the remainder thereafter.

The Company’s remaining performance obligations were $ 1.4 billion as of June 30, 2024, of which the Company expects to recognize approximately 50 % as revenue over the next 12 months, 39 % as revenue over the subsequent 13 to 36 months, and the remainder thereafter.

Disaggregation of Revenue

Segment and Geographic Information for disaggregated revenue by customer segment and geographic region.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Investments and Fair Value Measurements

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, 2024

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

As of June 30, 2024

Total Level 1 Level 2 Level 3

24 unchanged sentences

Debt Securities

As of March 31, 2024, available-for-sale debt securities, all of which are included in marketable securities on the condensed consolidated balance sheet, consisted of the following (in thousands):

As of March 31, 2024

As of June 30, 2024, available-for-sale debt securities, all of which are included in marketable securities on the condensed consolidated balance sheet, consisted of the following (in thousands):

As of June 30, 2024

Amortized Cost Unrealized Gains Unrealized Losses Fair Value

10 unchanged sentences

Included in marketable securities $ 2,821,427 $ 4,519 $ ( 1,085 ) $ 2,824,861

The Company did not sell any available-for-sale debt securities during the three months ended March 31, 2024, and sold $ 694.6 million of available-for-sale debt securities during the three months ended March 31, 2023, the proceeds of which were immediately reinvested into additional debt securities.

The Company did not sell any available-for-sale debt securities during the three and six months ended June 30, 2024 or for the three months ended June 30, 2023.

The Company sold $ 694.6 million of available-for-sale 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, 2024 or 2023.

As of March 31, 2024 and December 31, 2023, available-for-sale debt securities of $ 2.3 billion and $ 236.0 million, respectively, 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, 2024 or December 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, 2024 or December 31, 2023.

No credit or non-credit losses related to debt securities were recorded during the three and six months ended June 30, 2024 and 2023.

As of June 30, 2024 and December 31, 2023, available-for-sale debt securities of $ 3.1 billion and $ 236.0 million, respectively, 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, 2024 or December 31, 2023 were in a continuous unrealized loss position for greater than 12 months.

All of the Company’s U.S.

treasury securities had remaining contractual maturities due within one year as of March 31, 2024.

treasury securities had remaining contractual maturities due within one year as of June 30, 2024.

Equity Securities

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 consideration.

Total equity securities received as noncash consideration was $ 10.9 million and $ 8.7 million during the three months ended March 31, 2024 and 2023, respectively.

The Company holds equity securities in publicly-traded companies, which are recorded at fair market value each reporting period in marketable securities on the condensed consolidated balance sheets.

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

For the three months ended March 31, 2024 and 2023, net unrealized losses from publicly-traded equity securities held at the end of each period were $ 10.9 million and $ 8.2 million, respectively.

For the three months ended June 30, 2024 and 2023, net unrealized losses from publicly-traded equity securities held at the end of each period were $ 6.6 million and $ 0.6 million, respectively.

For the six months ended June 30, 2024 and 2023, net unrealized losses from publicly-traded equity securities held at the end of each period were $ 12.2 million and $ 7.0 million, respectively.

The Company also holds equity securities in privately-held companies without readily determinable fair values that are recorded using the measurement alternative.

As of March 31, 2024 and December 31, 2023, the total amount of privately-held equity securities included in other assets on the consolidated balance sheets was $ 35.1 million and $ 32.6 million, respectively.

As of June 30, 2024 and December 31, 2023, the total amount of privately-held equity securities included in other assets on the consolidated balance sheets was $ 49.9 million and $ 32.6 million, respectively.

The Company classifies these fair value measurements as Level 3 within the fair value hierarchy.

The Company did not record any material adjustments or impairments for the privately-held equity securities held for the three months ended March 31, 2024 and 2023.

The Company did not record any material adjustments or impairments for the privately-held equity securities held during the three and six months ended June 30, 2024 and 2023.

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

Total equity securities received as noncash consideration was $ 30.3 million and $ 14.5 million during the six months ended June 30, 2024 and 2023, respectively.

Strategic Commercial Contracts

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”).

No Investments were purchased under such Investment Agreements during the three months ended March 31, 2024 or the fiscal year ended December 31, 2023.

No Investments were purchased under such Investment Agreements during the six months ended June 30, 2024 or the fiscal year ended December 31, 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 performs ongoing assessments of customers’ financial condition, including the consideration of 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.

During the three months ended March 31, 2024 and 2023, revenue recognized from Strategic Commercial Contracts was $ 23.9 million and $ 33.4 million, respectively.

During the three months ended June 30, 2024 and 2023, revenue recognized from Strategic Commercial Contracts was $ 9.2 million and $ 19.4 million, respectively.

During the six

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

months ended June 30, 2024 and 2023, revenue recognized from Strategic Commercial Contracts was $ 33.1 million and $ 52.8 million, respectively.

Balance Sheet Components

1 unchanged sentence

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

As of March 31, 2024 As of December 31, 2023

As of June 30,

2024 As of December 31,

Leasehold improvements $ 84,407 $ 83,139

5 unchanged sentences

Total property and equipment, net $ 43,483 $ 47,758

Depreciation and amortization expense related to property and equipment, net was $ 6.0 million and $ 5.9 million for the three months ended March 31, 2024 and 2023, respectively.

Depreciation and amortization expense related to property and equipment, net was $ 6.0 million and $ 6.0 million for the three months ended June 30, 2024 and 2023, respectively, and $ 12.1 million and $ 11.9 million for the six months ended June 30, 2024 and 2023, respectively.

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

As of March 31, 2024 As of December 31, 2023

As of June 30,

2024 As of December 31,

Accrued payroll and related expenses $ 61,986 $ 83,094

4 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 March 31, 2024, the Company had no outstanding debt balances and had 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.

As of June 30, 2024, the Company had no outstanding debt balances and had 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.

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, 2024.

The Company was in compliance with all covenants associated with the 2014 Credit Facility as of June 30, 2024.

Commitments and Contingencies

3 unchanged sentences

Under this amendment, the Company has committed 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.

As of March 31, 2024, the Company satisfied $ 90.5 million of its $ 154.0 million commitment for contract year three ending September 30, 2024.

Additionally, as of March 31, 2024, there were no material changes outside the ordinary course of business to the Company’s commitments, as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2023.

Litigation and Legal Proceedings

From time to time, third parties may assert patent infringement claims against the Company.

In addition, from time to time, the Company may be subject to other legal proceedings and claims in the ordinary course of business, including claims of alleged

As of June 30, 2024, the Company satisfied $ 144.9 million of its $ 154.0 million commitment for the contract year beginning October 1, 2023 and ending September 30, 2024.

Additionally, as of June 30, 2024, there were no material changes outside the ordinary course of business of the Company’s commitments, as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2023.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

infringement of trademarks, copyrights, and other intellectual property rights;

Litigation and Legal Proceedings

From time to time, third parties may assert patent infringement claims against the Company.

In addition, from time to time, the Company may be subject to other legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of trademarks, copyrights, and other intellectual property rights;

employment claims;

26 unchanged sentences

On March 31, 2024, the Court dismissed the Cupat matter without prejudice.

On November 21, 2022 and January 13, 2023, stockholder derivative actions were filed in the United States District Court for the District of Colorado, captioned Li v.

22-cv-3028 and Parmenter v.

On May 24, 2024, plaintiffs filed a second amended complaint.

On November 21, 2022 a stockholder derivative action was filed in the United States District Court for the District of Colorado, captioned Li v.

22-cv-3028 and on January 27, 2023, a stockholder derivative action was filed in the United States District Court for the District of Delaware, captioned Miao v.

3 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.

On November 20, 2023, the plaintiff in Parmenter v.

Karp, et al ., Case No.

23-cv-118, filed a Notice of Voluntary Dismissal.

On November 28, 2023, the court terminated the Parmenter action accordingly.

As of March 31, 2024, 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, 2024, 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.

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, 2024 and December 31, 2023.

The Company has not recorded warranty expense or related accruals as of June 30, 2024 and December 31, 2023.

The Company generally agrees to indemnify its customers against legal claims that the Company’s software products infringe certain third-party intellectual property rights and accounts for its indemnification obligations.

3 unchanged sentences

or, if those options are not commercially practicable, to refund the cost of the software, as prorated over the period.

To date, the Company has not been required to make any payment resulting from infringement claims asserted against its customers and does not believe that the Company will be liable for such claims in the

To date, the Company has not been required to make any payment resulting from

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

foreseeable future.

As such, the Company has not recorded a liability for infringement costs as of March 31, 2024 and December 31, 2023.

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, 2024 and December 31, 2023.

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.

4 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 March 31, 2024.

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, 2024.

No dividends have been declared as of June 30, 2024.

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

As of March 31, 2024 As of December 31, 2023

As of June 30, 2024 As of December 31, 2023

Authorized Issued and Outstanding Authorized Issued and Outstanding

8 unchanged sentences

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 March 31, 2024, the Company repurchased and subsequently retired 0.4 million shares of its Class A common stock for an aggregate amount, including commissions, of $ 9.0 million under the Share Repurchase Program.

During the three and six months ended June 30, 2024, the Company repurchased and subsequently retired 0.8 million and 1.2 million shares, respectively, of its Class A common stock for an aggregate amount, including commissions, of $ 17.7 million and $ 26.7 million, respectively under the Share Repurchase Program.

As of June 30, 2024, approximately $ 973.3 million of the originally authorized amount under the Share Repurchase Program remained available for future repurchases.

Palantir Technologies Inc.

2 unchanged sentences

Stock Options and SARs

The following table summarizes stock option and SAR activity for the three months ended March 31, 2024 (in thousands, except per share amounts and years):

The following table summarizes stock option and SAR activity for the six months ended June 30, 2024 (in thousands, except per share amounts and years):

Options Outstanding SARs Outstanding

6 unchanged sentences

Balance as of December 31, 2023 278,470 $ 8.62 7.6 $ 2,381,172 — $ — 0.0 $ —

— — 44,283 50.00

Granted — — 44,593 50.00

Exercised ( 20,876 ) 4.78 — —

Canceled and forfeited ( 630 ) 5.94 ( 2,018 ) 50.00

Balance as of March 31, 2024 260,529 $ 8.88 7.5 $ 3,681,164 43,384 $ 50.00 39.8 $ —

Vested and exercisable as of March 31, 2024 148,070 $ 7.02 6.9 $ 2,368,058 — $ — 0.0 $ —

As of March 31, 2024, the total unrecognized stock-based compensation expense related to options and SARs outstanding was $ 573.7 million and $ 137.9 million, respectively, which is expected to be recognized over a weighted-average service period of seven years and five years , respectively.

During the three months ended March 31, 2024, the Company granted SARs that vest upon the achievement of a market-based vesting condition subject to continued service.

Balance as of June 30, 2024 256,964 $ 8.94 7.3 $ 4,212,345 42,575 $ 50.00 39.5 $ —

Vested and exercisable as of June 30, 2024 149,463 $ 7.20 6.7 $ 2,710,036 — $ — 0.0 $ —

As of June 30, 2024, the total unrecognized stock-based compensation expense related to options and SARs outstanding was $ 548.8 million, and $ 128.6 million, respectively, which is expected to be recognized over a weighted-average service period of seven and four years , respectively.

During the six months ended June 30, 2024, the Company granted SARs that vest upon the achievement of a market-based vesting condition subject to continued service.

The market-based vesting condition is satisfied when the price per share of the Company’s Class A common stock exceeds $ 50 (measured based on the closing price on the immediately prior trading day) (an “Above Price Day”).

2 unchanged sentences

The Company determined the grant date fair value of SARs using a Monte Carlo simulation model which incorporates various assumptions including the contractual term, expected stock price volatility, risk-free interest rate, suboptimal exercise factor, annual post-vest termination rate, and cost of capital as of the grant date.

For the awards granted during the three months ended March 31, 2024, the assumptions used in the Monte Carlo simulation model were as follows:

March 31, 2024

For the awards granted during the six months ended June 30, 2024, the assumptions used in the Monte Carlo simulation model included the following:

Six Months Ended

June 30, 2024

Expected volatility rate 58.2 % - 58.9 %

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Treasury yield curve in effect at the time of grant.

The derived service period for the SARs granted during the three months ended March 31, 2024 was five years .

The SARs granted during the six months ended June 30, 2024 had derived service periods of up to five years .

Palantir Technologies Inc.

1 unchanged sentence

RSUs and P-RSUs

The following table summarizes the RSU and P-RSU activity for the three months ended March 31, 2024 (in thousands, except per share amounts):

The following table summarizes the RSU and P-RSU activity for the six months ended June 30, 2024 (in thousands, except per share amounts):

RSUs Outstanding Weighted Average Grant Date Fair Value per Share P-RSUs Outstanding Weighted Average Grant Date Fair Value per Share

5 unchanged sentences

— — ( 1,094 ) 16.42

Unvested and outstanding as of March 31, 2024 73,974 $ 10.54 1,960 $ 14.90

Unvested and outstanding as of June 30, 2024 66,607 $ 10.44 1,198 $ 21.59

(1) This amount represents the difference between the maximum number of shares that could have been issued under the grant and the actual number of shares earned based on final performance.

As of March 31, 2024, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $ 490.5 million, which the Company expects to recognize over a weighted-average service period of three years .

As of March 31, 2024, there was no unrecognized stock-based compensation expense related to the P-RSUs outstanding.

As of June 30, 2024, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $ 430.3 million, which the Company expects to recognize over a weighted-average service period of three years .

As of June 30, 2024, there was no unrecognized stock-based compensation expense related to the P-RSUs outstanding.

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,

2024 2023 2024 2023

Cost of revenue $ 12,402 $ 8,004 $ 22,818 $ 17,181

3 unchanged sentences

Total stock-based compensation expense $ 141,764 $ 114,201 $ 267,415 $ 228,915

The Company recorded a provision for income taxes of $ 4.7 million and $ 1.7 million for the three months ended March 31, 2024 and 2023, respectively.

The Company recorded a provision for income taxes of $ 5.2 million and $ 2.2 million for the three months ended June 30, 2024 and 2023, respectively, and a provision for income taxes of $ 9.8 million and $ 3.9 million for the six months ended June 30, 2024 and 2023, 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, 2024 differs from the U.S.

The Company’s effective tax rate as of June 30, 2024 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 .

The provision for income taxes increased by $ 3.0 million for the three months ended March 31, 2024 compared to the same period in 2023 primarily related to higher foreign income taxes as the result of higher foreign taxable income and higher withholding taxes in the current year.

The provision for income taxes increased by $ 3.0 million and $ 6.0 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 primarily related to increased foreign tax expense as a result of higher foreign taxable income and withholding taxes, as well as increases in state taxes.

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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For example, due to the weight of objectively verifiable negative evidence, including its history of U.S.

net operating tax losses, the Company believes that it is more likely than not that its U.S.

deferred tax assets will not be fully realized.

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

deferred tax assets as of March 31, 2024.

net operating tax losses, the Company has maintained a full valuation allowance on its U.S.

deferred tax assets as of June 30, 2024.

However, given the Company’s recent earnings and anticipated future earnings, there is a reasonable possibility that it will have sufficient positive evidence in the future to release all or a portion of the valuation allowance it recorded against its deferred tax assets.

Palantir Technologies Inc.

5 unchanged sentences

The following table presents the calculation of basic and diluted net earnings 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,

2024 2023 2024 2023

Net income attributable to common stockholders for diluted net earnings per share $ 134,126 $ 28,127 $ 239,656 $ 44,929

8 unchanged sentences

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

Three Months Ended March 31,

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

2024 2023 2024 2023

Options issued and outstanding — 162,000 — 162,000

2 unchanged sentences

Total 787 186,882 787 191,577

For the three months ended March 31, 2024, the Company also excluded the impact of 43.4 million SARs that may settle in shares of Class A common stock from the computation of diluted net earnings per share because the exercise price of such SARs was greater than the average market price of the Class A common stock for the applicable period.

For the three and six months ended June 30, 2024, the Company also excluded the impact of 42.6 million SARs that may settle in shares of Class A common stock from the computation of diluted net earnings per share because the exercise price of such SARs was greater than the average market price of the Class A common stock for the applicable period.

When such SARs are vested, the maximum number of potentially dilutive Class A common shares is the fraction that equals the maximum appreciation divided by the Company’s Class A common stock price at that time.

4 unchanged sentences

A segment’s contribution is calculated as segment revenue less the related costs of revenue and sales and marketing expenses.

It excludes certain operating expenses that are not allocated to segments because they are separately managed at the consolidated corporate level or are noncash costs.

These unallocated and noncash 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

certain operating expenses that are not allocated to segments because they are separately managed at the consolidated corporate level or are noncash costs.

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

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,

2024 2023 2024 2023

Government $ 370,767 $ 301,505 $ 706,140 $ 590,575

1 unchanged sentence

Total revenue $ 678,134 $ 533,317 $ 1,312,472 $ 1,058,503

Three Months Ended March 31,

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

2024 2023 2024 2023

Contribution:

2 unchanged sentences

Total contribution $ 413,479 $ 288,390 $ 790,956 $ 567,550

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

Three Months Ended March 31,

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

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

2024 2023 2024 2023

Income from operations $ 105,339 $ 10,074 $ 186,220 $ 14,189

9 unchanged sentences

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,

2024 2023 2024 2023

Amount % Amount % Amount % Amount %

United States $ 437,189 64 % $ 328,012 62 % $ 843,578 64 % $ 664,857 63 %

United Kingdom 76,991 11 % 63,229 12 % 140,192 11 % 112,808 11 %

Rest of world (1)

1 unchanged sentence

Total revenue $ 678,134 100 % $ 533,317 100 % $ 1,312,472 100 % $ 1,058,503 100 %

(1) No other country represents 10 % or more of total revenue for the three months ended March 31, 2024 or 2023.

(1) No other country represents 10 % or more of total revenue for the three and six months ended June 30, 2024 or 2023.

Palantir Technologies Inc.

2 unchanged sentences

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

Weighted average useful life (years)

As of March 31, 2024 As of December 31, 2023

Weighted average useful life (years) As of June 30, 2024 As of December 31, 2023

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

4 unchanged sentences

Total intangible assets $ 38,943 $ ( 17,469 ) $ 21,474 $ 38,943 $ ( 13,041 ) $ 25,902

Amortization expense of intangible assets was not material for the three months ended March 31, 2024 or 2023.

As of March 31, 2024, expected amortization expense for the unamortized finite-lived intangible assets is as follows (in thousands):

Year ended December 31,

Amortization expense of intangible assets was not material for the three and six months ended June 30, 2024 or 2023.

As of June 30, 2024, expected amortization expense for the unamortized finite-lived intangible assets is as follows (in thousands):

Year ended December 31, Amount

Remainder of 2024 $ 3,416

49 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