What changed in this filing

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Item 1. Financial Statements

2024-11-05 compared with 2024-08-06 · 170 added, 134 removed, 536 unchanged (36% of the section changed)

3 unchanged sentences

(in thousands, except per share amounts)

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

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, 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

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

2,172,437 and 2,096,982 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively;

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

96,367 and 102,141 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively;

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

Additional paid-in capital 9,757,380 9,122,173

Accumulated other comprehensive income (loss), net ( 4,935 ) 801

Accumulated other comprehensive income, net 4,925 801

Accumulated deficit ( 5,266,432 ) ( 5,649,613 )

7 unchanged sentences

(in thousands, except per share amounts)

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

13 unchanged sentences

Net income 149,341 73,439 390,982 120,462

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

Net income attributable to noncontrolling interests 5,816 1,934 7,801 4,028

Net income attributable to common stockholders $ 143,525 $ 71,505 $ 383,181 $ 116,434

7 unchanged sentences

(in thousands)

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

2 unchanged sentences

Foreign currency translation adjustments 5,887 ( 2,164 ) 4,719 ( 1,268 )

Net unrealized loss on available-for-sale securities

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

Net unrealized gain (loss) on available-for-sale securities 4,094 168 ( 581 ) ( 604 )

Comprehensive income 159,322 71,443 395,120 118,590

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 noncontrolling interests 5,937 1,934 7,815 4,028

Comprehensive income attributable to common stockholders $ 153,385 $ 69,509 $ 387,305 $ 114,562

3 unchanged sentences

(in thousands)

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

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

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

Issuance of common stock from the exercise of stock options 23,312 24 170,313 — — 170,337 — 170,337

4 unchanged sentences

Net income — — — — 143,525 143,525 5,816 149,341

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

Balance as of September 30, 2024 2,269,809 $ 2,270 $ 9,757,380 $ 4,925 $ ( 5,266,432 ) $ 4,498,143 $ 93,219 $ 4,591,362

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

5 unchanged sentences

Stock-based compensation — — 410,668 — — 410,668 — 410,668

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

Other comprehensive income (loss) — — — 4,124 — 4,124 14 4,138

Net income — — — — 383,181 383,181 7,801 390,982

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

Balance as of September 30, 2024 2,269,809 $ 2,270 $ 9,757,380 $ 4,925 $ ( 5,266,432 ) $ 4,498,143 $ 93,219 $ 4,591,362

Palantir Technologies Inc.

Condensed Consolidated Statements of Equity

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands)

1 unchanged sentence

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

7 unchanged sentences

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

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

31 unchanged sentences

Effect of foreign exchange on cash, cash equivalents, and restricted cash 960 ( 2,113 )

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

Net decrease in cash, cash equivalents, and restricted cash ( 61,651 ) ( 1,565,449 )

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 six months ended June 30, 2024, except for the changes noted below.

There have been no significant changes to these policies during the nine months ended September 30, 2024, 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 $ 768,710 $ 1,040,310

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 June 30, 2024 and December 31, 2023, the Company recorded an allowance for credit losses of $ 2.8 million and $ 10.5 million, respectively.

Based upon the Company’s assessment as of September 30, 2024 and December 31, 2023, the Company recorded an allowance for credit losses of $ 1.5 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 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.

The Company’s accounts receivable balances as of September 30, 2024 and December 31, 2023 were $ 668.1 million and $ 364.8 million, respectively.

Customer I represented 21 % and 15 % of total accounts receivable as of September 30, 2024 and December 31, 2023, respectively, and Customer J represented 17 % of total accounts receivable as of September 30, 2024.

No other customer represented more than 10% of total accounts receivable as of September 30, 2024 or December 31, 2023.

For the three and nine months ended September 30, 2024 and 2023, no customer represented more than 10% of total revenue.

Share Repurchase Program

4 unchanged sentences

The Company determines the fair value of stock-based awards granted or modified on the grant date or modification date using appropriate valuation techniques.

The assumptions used to determine the grant-date fair value of the awards represent management’s best estimates.

These estimates involve inherent uncertainties and the application of management’s judgment.

The Company recognizes forfeitures as they occur.

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 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

Service-Based Awards

The Company grants awards, including RSUs, stock option awards, and stock appreciation rights (“SARs”), which vest based upon the satisfaction of a service condition.

For such awards, the Company records stock-based compensation expense on a

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.

The Black-Scholes option pricing model requires the input of highly subjective assumptions, including the expected term of the option, the expected volatility of the price of the common stock, risk-free interest rates, and the expected dividend yield of the common stock.

The assumptions used to determine the fair value of the option awards represent management’s best estimates.

These estimates involve inherent uncertainties and the application of management’s judgment.

Performance-Based Vesting

straight-line basis over the requisite service period.

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.

For stock option awards and SARs that vest over an explicit service period and are exercisable at expiration, during a limited window (“Time-Vesting SARs”), the Company uses the Black-Scholes-Merton (“Black-Scholes”) option pricing model to determine the grant-date fair value of the awards.

The Black-Scholes option pricing model requires the input of highly subjective assumptions, including the expected term of the award, the expected volatility rate, risk-free interest rate, and the expected dividend yield of the common stock.

Performance-Based Awards

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

2 unchanged sentences

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 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.

If the market condition is achieved earlier than its estimated derived service period, the stock-based compensation expense will be accelerated, and a cumulative catch-up expense will be recorded during the period in which the market condition is met.

Once the derived service period is complete, previously recognized stock-based compensation expense related to market-based SARs will not be reversed even if the specified market condition is not achieved.

Market-Based Awards

The Company grants awards, including SARs, that vest upon the satisfaction of market-based vesting conditions.

For SARs that vest upon the satisfaction of a market-based vesting condition without an explicit service-based condition (“Market-Vesting SARs”), the Company estimates the grant-date fair value of the awards and the corresponding derived service period using a Monte Carlo simulation model, which requires the use of various assumptions including the contractual term, expected volatility rate, risk-free interest rate, suboptimal exercise factor, annual post-vest termination rate, and cost of equity as of the grant date.

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

If the market condition is achieved earlier than its derived service period, the remaining stock-based compensation expense will be accelerated, and a cumulative catch-up expense will be recorded during the period in which the market condition is met.

Once the derived service period is complete, previously recognized stock-based compensation expense related to Market-Vesting SARs will not be reversed even if the specified market condition is not achieved.

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, 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.

As of September 30, 2024 and December 31, 2023, the Company's contract liability balances were $ 615.1 million and $ 486.3 million, respectively.

Revenue of $ 440.9 million and $ 314.9 million was recognized during the nine months ended September 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 $ 1.4 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.

The Company’s remaining performance obligations were $ 1.6 billion as of September 30, 2024, of which the Company expects to recognize approximately 46 % 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.

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):

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

As of June 30, 2024

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 September 30, 2024

Total Level 1 Level 2 Level 3

24 unchanged sentences

Debt Securities

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

As of September 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 September 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 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 Company did not sell any available-for-sale debt securities during the three and nine months ended September 30, 2024 or for 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 debt securities.

The realized gains and losses from those sales were immaterial.

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.

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, 2024 or December 31, 2023.

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

As of September 30, 2024 and December 31, 2023, available-for-sale debt securities of $ 76.9 million 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 September 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 June 30, 2024.

Treasury securities had remaining contractual maturities due within one year as of September 30, 2024.

Equity Securities

1 unchanged sentence

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 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.

For the three months ended September 30, 2024 and 2023, net unrealized losses from publicly-traded equity securities held at the end of each period were $ 5.4 million and $ 0.7 million, respectively.

For the nine months ended September 30, 2024 and 2023, net unrealized losses from publicly-traded equity securities held at the end of each period were $ 12.2 million and $ 5.6 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 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.

As of September 30, 2024 and December 31, 2023, the total amount of privately-held equity securities included in other assets on the consolidated balance sheets was $ 52.6 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 during the three and six months ended June 30, 2024 and 2023.

The Company did not record any material adjustments or impairments for the privately-held equity securities held during the three and nine months ended September 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.

Total equity securities received as noncash consideration was $ 41.5 million and $ 17.3 million during the nine months ended September 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 six months ended June 30, 2024 or the fiscal year ended December 31, 2023.

No Investments were purchased under such Investment Agreements during the nine months ended September 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 June 30, 2024 and 2023, revenue recognized from Strategic Commercial Contracts was $ 9.2 million and $ 19.4 million, respectively.

During the six

During the three months ended September 30, 2024 and 2023, revenue recognized from Strategic Commercial Contracts was $ 9.6 million and $ 14.7 million, respectively.

During the nine

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.

months ended September 30, 2024 and 2023, revenue recognized from Strategic Commercial Contracts was $ 42.7 million and $ 67.4 million, respectively.

Balance Sheet Components

1 unchanged sentence

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

As of June 30,

2024 As of December 31,

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

Leasehold improvements $ 86,691 $ 83,139

5 unchanged sentences

Total property and equipment, net $ 40,345 $ 47,758

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.

Depreciation and amortization expense related to property and equipment, net was $ 6.1 million and $ 6.3 million for the three months ended September 30, 2024 and 2023, respectively, and $ 18.2 million and $ 18.2 million for the nine months ended September 30, 2024 and 2023, respectively.

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

As of June 30,

2024 As of December 31,

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

Accrued payroll and related expenses $ 117,588 $ 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 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.

As of September 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 June 30, 2024.

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

The Company satisfied its $ 154.0 million commitment for the contract year ending September 30, 2024.

The commitment amount for the contract year beginning October 1, 2024 and ending September 30, 2025 is $ 160.2 million.

Additionally, as of September 30, 2024, there were no material changes outside the ordinary course of

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

business of 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

36 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 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.

As of September 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 June 30, 2024 and December 31, 2023.

The Company has not recorded warranty expense or related accruals as of September 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.

1 unchanged sentence

In addition, in the event of an infringement, the Company generally agrees to secure the right for the customer to continue using the infringing product;

to modify or replace the infringing product;

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

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

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.

modify or replace the infringing product;

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

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

As such, the Company has not recorded a liability for infringement costs as of September 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 June 30, 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 June 30, 2024.

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

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

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

As of September 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 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.

During the three and nine months ended September 30, 2024, the Company repurchased and subsequently retired 0.6 million and 1.8 million shares, respectively, of its Class A common stock for an aggregate amount, including commissions, of $ 18.9 million and $ 45.6 million, respectively under the Share Repurchase Program.

As of September 30, 2024, approximately $ 954.4 million of the originally authorized amount under the Share Repurchase Program remained available for future repurchases.

Palantir Technologies Inc.

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Stock Options and SARs

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):

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

Options Outstanding SARs Outstanding

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Canceled and forfeited ( 925 ) 5.76 ( 3,495 ) 50.00

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”).

Following vesting, SARs may only be exercised on an Above Price Day which occurs within an open trading window.

The maximum appreciation is up to $20 per SAR.

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

Six Months Ended

June 30, 2024

Balance as of September 30, 2024 233,357 $ 9.10 7.1 $ 6,556,252 47,963 $ 50.76 35.0 $ —

Vested and exercisable as of September 30, 2024 130,807 $ 7.32 6.5 $ 3,908,239 — $ — 0.0 $ —

As of September 30, 2024, the total unrecognized stock-based compensation expense related to options and SARs outstanding was $ 524.3 million and $ 176.5 million, respectively, which is expected to be recognized over a weighted-average service period of six and five years , respectively.

Of the total SARs outstanding, $ 119.7 million of unrecognized expense would be accelerated if the market condition related to Market-Vesting SARs is achieved earlier than its derived service period.

The weighted-average grant-date fair value of SARs granted during the nine months ended September 30, 2024 was $ 4.06 per share.

Market-Vesting SARs

During the nine months ended September 30, 2024, the Company granted Market-Vesting SARs that vest upon the satisfaction of a market-based vesting condition and are 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 within an open trading window (measured based on the closing price on the immediately prior trading day) (an “Above Price Day”).

Following the satisfaction of such condition, Market-Vesting SARs may only be exercised on an Above Price Day.

The maximum appreciation is up to $ 20 per Market-Vesting SAR.

The Company determined the grant-date fair value of Market-Vesting 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 Market-Vesting SARs granted during the nine months ended September 30, 2024, the assumptions used in the Monte Carlo simulation model included the following:

Nine Months Ended

September 30, 2024

Expected volatility rate 58.2 % - 58.9 %

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The risk-free interest rate is based on the U.S.

Treasury yield curve in effect at the time of grant.

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

Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of the SAR.

The Market-Vesting SARs granted during the nine months ended September 30, 2024 had derived service periods of up to five years .

Time-Vesting SARs

During the nine months ended September 30, 2024, the Company granted Time-Vesting SARs which vest over explicit service periods of up to nine years .

Additionally, such Time-Vesting SARs become exercisable at expiration, during a limited window

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(“Exercise Window”), if the Company’s stock price reaches a certain threshold.

Time-Vesting SARs have exercise prices of between $ 39 –$ 70 and maximum appreciation values of between $ 60 –$ 180 .

The Company determined the grant-date fair value of Time-Vesting SARs using a Black-Scholes option-pricing model, calculated as the difference in fair value between a SAR with a strike price at the exercise price and a SAR with the strike price at its maximum appreciation, using the following assumptions:

Nine Months Ended

September 30, 2024

Expected volatility rate 55.0 % - 59.2 %

Expected term (in years) 3.7 - 9.2

Risk-free interest rate 3.4 % - 3.7 %

Expected dividend yield — %

The expected volatility rate is based on a combination of the Company’s implied and historical volatility, and the historical volatility of comparable publicly-traded companies.

The expected term represents the period of time the SARs are expected to be outstanding.

The risk-free interest rate is based on the U.S.

Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of the SAR.

The Company has never paid and has no plans to pay dividends on its common stock, therefore the expected dividend yield is zero.

RSUs and P-RSUs

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

The following table summarizes the RSU and P-RSU activity for the nine months ended September 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

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— — ( 1,370 ) 17.46

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

Unvested and outstanding as of September 30, 2024 72,201 $ 14.36 862 $ 28.81

(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 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.

As of September 30, 2024, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $ 789.2 million, which the Company expects to recognize over a weighted-average service period of three years .

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

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

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,

2024 2023 2024 2023

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Total stock-based compensation expense $ 142,425 $ 114,380 $ 409,840 $ 343,295

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 recorded a provision for income taxes of $ 7.8 million and $ 6.5 million for the three months ended September 30, 2024 and 2023, respectively, and of $ 17.7 million and $ 10.4 million for the nine months ended September 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 June 30, 2024 differs from the U.S.

The Company’s effective tax rate as of September 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 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 provision for income taxes increased by $ 1.3 million and $ 7.3 million for the three and nine months ended September 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.

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

deferred tax assets as of June 30, 2024.

deferred tax assets as of September 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.

Notes to Unaudited Condensed Consolidated Financial Statements

On August 16, 2022, the Inflation Reduction Act was signed into law, with tax provisions primarily focused on implementing a 15% minimum tax on global adjusted financial statement income and a 1% excise tax on the value of net share repurchases.

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Based on the Company’s current analysis of the provisions, the law has not had a material impact on the Company’s condensed consolidated financial statements.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Net Earnings Per Share Attributable to Common Stockholders

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 June 30, Six Months Ended June 30,

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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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 June 30, Six Months Ended June 30,

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Total 6,748 19,983 6,748 187,074

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.

For the three and nine months ended September 30, 2024, the Company also excluded the impact of 48.0 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.

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.

Segment and Geographic Information

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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 June 30, Six Months Ended June 30,

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Total revenue $ 725,516 $ 558,159 $ 2,037,988 $ 1,616,662

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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The reconciliation of contribution to income 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,

2024 2023 2024 2023

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Total revenue $ 725,516 100 % $ 558,159 100 % $ 2,037,988 100 % $ 1,616,662 100 %

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

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

Palantir Technologies Inc.

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

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

Weighted average useful life As of September 30, 2024 As of December 31, 2023

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 $ ( 19,456 ) $ 19,487 $ 38,943 $ ( 13,041 ) $ 25,902

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):

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

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

Year ended December 31, Amount

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• our ability to successfully execute our business and growth strategy;

• the sufficiency of our cash and cash equivalents to meet our liquidity needs;

• the sufficiency of our available funds to meet our liquidity needs;

• the demand for our platforms in general;

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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