What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-18 compared with 2024-02-20 · 240 added, 225 removed, 861 unchanged (35% of the section changed)

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Consolidated Statements of Comprehensive Income (Loss )

Consolidated Statements of Stockholders' Equity

Consolidated Statements of Equity

Consolidated Statements of Cash Flows

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We have audited the accompanying consolidated balance sheets of Palantir Technologies Inc.

(the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated February 20, 2024 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated February 18, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

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Total assets $ 6,340,884 $ 4,522,425

Liabilities and Stockholders' Equity

Liabilities and Equity

Current liabilities:

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Commitments and Contingencies (Note 8)

Stockholders’ equity:

Palantir's stockholders’ equity:

Common stock, $ 0.001 par value:

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Accumulated deficit ( 5,187,423 ) ( 5,649,613 )

Total stockholders’ equity 3,475,561 2,565,326

Total Palantir's stockholders’ equity 5,003,275 3,475,561

Noncontrolling interests 91,132 85,404

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Interest income 196,792 132,572 20,309

Interest expense ( 3,470 ) ( 4,058 ) ( 3,640 )

Other income (expense), net ( 18,022 ) ( 15,447 ) ( 220,135 )

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Weighted-average shares of common stock outstanding used in computing net earnings (loss) per share attributable to common stockholders, basic 2,250,163 2,147,446 2,063,793

2,147,446 2,063,793 1,923,617

Weighted-average shares of common stock outstanding used in computing net earnings (loss) per share attributable to common stockholders, diluted 2,450,818 2,297,927 2,063,793

2,297,927 2,063,793 1,923,617

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

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Palantir Technologies Inc.

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Equity

(in thousands)

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

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

Shares Amount

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Issuance of common stock upon vesting of restricted stock units (“RSUs”) 51,941 52 ( 52 ) — — — — —

Issuance of common stock upon vesting of growth units 1,471 1 ( 1 ) — — —

Issuance of common stock upon net exercise of common stock warrants and other 4,664 6 1,706 — — 1,712

Stock-based compensation — — 564,897 — — 564,897 — 564,897

Other comprehensive income — — — 396 — 396

Net loss — — — — ( 520,379 ) ( 520,379 )

Other comprehensive loss — — — ( 2,984 ) — ( 2,984 ) — ( 2,984 )

Noncontrolling interests — — — — — — 74,500 74,500

Net income (loss) — — — — ( 373,705 ) ( 373,705 ) 2,611 ( 371,094 )

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

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 Palantir’s Stockholders’ Equity Noncontrolling Interests Total Equity

Shares Amount

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Stock-based compensation — — 476,038 — — 476,038 — 476,038

Other comprehensive loss — — — ( 2,984 ) — ( 2,984 ) — ( 2,984 )

Noncontrolling interests — — — — — — 74,500 74,500

Net income (loss) — — — — ( 373,705 ) ( 373,705 ) 2,611 ( 371,094 )

Other comprehensive income — — — 6,134 — 6,134 — 6,134

Other, net — — — — — — 743 743

Net income — — — — 209,825 209,825 7,550 217,375

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

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (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 Palantir’s Stockholders’ Equity Noncontrolling Interests Total Equity

Shares Amount

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Issuance of common stock from the exercise of stock options 99,297 100 745,296 — — 745,396 — 745,396

Issuance of common stock upon vesting of RSUs 54,974 55 ( 55 ) — — — — —

Issuance of common stock from the exercise of stock appreciation rights (“SARs”), net of shares withheld for employee taxes 5,943 6 ( 302,493 ) — — ( 302,487 ) — ( 302,487 )

Issuance of common stock upon release of RSUs and performance-based RSUs (“P-RSUs”) 35,550 35 ( 35 ) — — — — —

Repurchases of common stock ( 2,123 ) ( 2 ) ( 64,194 ) — — ( 64,196 ) — ( 64,196 )

Stock-based compensation — — 693,223 — — 693,223 — 693,223

Other comprehensive loss — — — ( 6,412 ) — ( 6,412 ) — ( 6,412 )

Other, net — — — — — — 743 743

Net income — — — — 462,190 462,190 5,728 467,918

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Stock-based compensation 691,638 475,903 564,798

Deferred income taxes ( 4,806 ) ( 174 ) 43,316

Noncash operating lease expense 41,239 47,019 40,309

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Noncash consideration ( 52,521 ) ( 46,609 ) ( 15,537 )

Gain from step acquisition — ( 44,306 ) —

Other operating activities 24,795 ( 34,255 ) ( 28,152 )

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Net cash provided by operating activities 1,153,865 712,183 223,737

712,183 223,737 333,851

Investing activities

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Proceeds from sales and redemption of marketable securities 5,073,507 2,889,268 52,319

Business combinations, net of cash acquired — 66,708 —

Purchases of alternative investments — — ( 50,941 )

Proceeds from sales of alternative investments 51,072 — —

Purchases of privately-held securities — — ( 23,009 )

Other investing activities ( 5,615 ) 51,072 66,781

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Financing activities

Principal payments on borrowings — — ( 200,000 )

Proceeds from the exercise of common stock options 745,396 218,238 86,089

Repurchases of common stock ( 64,196 ) — —

Taxes paid related to net share settlement of equity awards ( 218,280 ) — —

Other financing activities 444 601 ( 93 )

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Net increase (decrease) in cash, cash equivalents, and restricted cash 1,269,829 ( 1,777,228 ) 260,421

( 1,777,228 ) 260,421 238,768

Cash, cash equivalents, and restricted cash - beginning of period 850,107 2,627,335 2,366,914

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Cash paid for income taxes $ 16,179 $ 13,515 $ 2,904

Noncash investing and financing activities

Accrued taxes related to net share settlement of equity awards $ 84,207 $ — $ —

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

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The preparation of the consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods.

Significant estimates and assumptions made in the accompanying consolidated financial statements include, but are not limited to, the identification of performance obligations in customer contracts, the valuation of deferred tax assets and uncertain tax positions, and the collectability of contract consideration, including accounts receivable.

Significant estimates and assumptions made in the accompanying consolidated financial statements include, but are not limited to, the identification of performance obligations in customer contracts, the valuation of deferred tax assets and uncertain tax positions, the valuation and recognition of stock-based compensation awards, and the collectability of contract consideration, including accounts receivable.

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

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• Government:

This segment primarily serves customers that are United States (“U.S.”) government and non-U.S.

This segment primarily serves customers that are U.S government and non-U.S.

government agencies.

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The Company considers all highly liquid investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents.

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

Cash equivalents primarily consist of amounts invested in money market funds and U.S.

Treasury securities with original maturities of three months or less.

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.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the amounts shown in the consolidated statements of cash flows (in thousands):

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

As of December 31,

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Total cash, cash equivalents, and restricted cash $ 2,119,936 $ 850,107 $ 2,627,335

Accounts Receivable and Allowance for Credit Losses

Accounts Receivable, Net

Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses.

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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 December 31, 2023 and 2022, the Company recorded an allowance for credit losses of $ 10.5 million and $ 10.1 million, respectively.

Based upon the Company’s assessment, the allowance for credit losses was immaterial and $ 10.5 million as of December 31, 2024 and 2023, respectively.

Debt Securities

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

The Company evaluates investments with unrealized loss positions for other than temporary impairment by assessing if they are related to deterioration in credit risk and whether it expects to recover the entire amortized cost basis of the security, the Company’s intent to sell, and whether it is more likely than not that the Company will be required to sell the securities before the recovery of their cost basis.

The Company evaluates investments with unrealized loss positions by assessing if they are related to deterioration in credit risk and whether it expects to recover the entire amortized cost basis of the security, the Company’s intent to sell, and whether it is more likely than not that the Company will be required to sell the securities before the recovery of their cost basis.

Credit-related impairment losses, not to exceed the amount that fair value is less than the amortized cost basis, are recognized in other income (expense), net in the consolidated statements of operations.

Unrealized gains and non-credit related losses are reported as a separate component of accumulated other comprehensive loss, net in the consolidated balance sheets until realized.

Realized gains and losses and declines in value judged to be other than temporary are determined based on the specific identification method and are reported in other income (expense), net in the consolidated statements of operations.

Unrealized gains and non-credit related losses are reported as a separate component of accumulated other comprehensive income (loss), net in the consolidated balance sheets until realized.

Realized gains and losses and declines in value are determined based on the specific identification method and are reported in other income (expense), net in the consolidated statements of operations.

Concentrations of Credit Risk

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The Company’s accounts receivable balances as of December 31, 2024 and 2023 were $ 575.0 million and $ 364.8 million, respectively.

Customer I represented 15 % of total accounts receivable as of December 31, 2023, and no other customer represented more than 10% of total accounts receivable as of December 31, 2023.

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

Customer I represented 26 % and 15 % of total accounts receivable as of December 31, 2024 and 2023, respectively, and no other customer represented more than 10% of total accounts receivable as of December 31, 2024 or 2023.

For the years ended December 31, 2024, 2023, and 2022, no customer represented 10% or more of total revenue.

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Notes to Consolidated Financial Statements (continued)

Alternative Investments

Alternative investments include gold bars and are recorded in prepaid expenses and other current assets on the consolidated balance sheets.

The investments are initially recorded at cost and subsequently remeasured at the lower of cost or market each reporting period.

Market value is determined by using quoted market prices of identical or similar assets from active markets.

Unrealized losses are recorded in other income (expense), net in the consolidated statements of operations.

Realized gains and losses are recorded in other income (expense), net upon realization.

Property and Equipment, Net

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Changes in the basis of the equity securities are recognized in other income (expense), net in the consolidated statements of operations.

Business Combinations

Business combinations are accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations, and are included in our consolidated financial statements from their respective acquisition dates.

Assets acquired and liabilities assumed, if any, are measured at fair value on the acquisition date using the appropriate valuation method.

Goodwill generated from acquisitions is recognized if the fair value of the purchase consideration transferred, or the fair value of the acquirer’s interest in the acquiree if no consideration is transferred, and any noncontrolling interests is in excess of the net fair value of the identifiable assets acquired and the liabilities assumed.

In determining the fair value of identifiable assets, we use various valuation techniques which require us to make estimates and assumptions surrounding projected revenues and costs, future growth, and discount rates.

Goodwill represents the excess of the fair value of the purchase consideration transferred, or the fair value of the acquirer’s interest in the acquiree if no consideration is transferred, and any noncontrolling interests over the net fair value of the identifiable assets acquired and the liabilities assumed in business combinations.

Goodwill is not amortized but is subject to an annual impairment test.

We perform our annual goodwill impairment assessment on the first day of the fourth quarter.

Tests are performed more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount.

Goodwill is recorded in other assets in the consolidated balance sheet.

Other Intangible Assets

Other intangible assets include finite-lived intangible assets, which mainly consist of customer relationships, reacquired rights, and backlog.

Intangible Assets

Intangible assets include finite-lived intangible assets, which mainly consist of customer relationships, reacquired rights, and backlog.

These assets are amortized over their estimated useful lives and are tested for impairment using a similar methodology to our property and equipment, as described below.

Other intangible assets are recorded in other assets in the consolidated balance sheets.

Intangible assets are recorded in other assets in the consolidated balance sheets.

Impairment of Long-Lived Assets

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Impairments of long-lived assets during the years ended December 31, 2024, 2023, and 2022 were not material.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

The Company determines if an arrangement is a lease at inception.

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The Company measures fair value based on a three-level hierarchy of inputs, maximizing the use of observable inputs, where available, and minimizing the use of unobservable inputs when measuring fair value.

A financial instrument’s level within the three-level hierarchy is based on the lowest level of input that is significant to the fair value measurement.

A financial instrument’s level within the

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

three-level hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The three-level hierarchy of inputs is as follows:

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and professional services.

In accordance with ASC 606, Revenue from Contracts with Customers , the Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services.

In accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , the Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services.

The Company applies the following five-step revenue recognition model in accounting for its revenue arrangements:

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

• Identification of the contract(s) with the customer, including whether collectability of the consideration is probable by considering the customers’ ability and intention to pay;

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Sales of the Company’s software licenses, primarily term licenses, grant customers the right to use functional intellectual property, either on their internal hardware infrastructure or on their own cloud instance, over the contractual term and are also sold together with stand-ready O&M services.

The O&M services include critical updates, support, and maintenance services required to operate the software and, as such, are necessary for the software to maintain its intended utility over the contractual term.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Because of this requirement, the Company has concluded that the software licenses and O&M services, which together the Company refers to as On-Premises Software, are highly interdependent and interrelated and represent a single distinct performance obligation within the context of the contract.

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The Company’s professional services support the customers’ use of the software platforms and include, as needed, on-demand user support, user-interface configuration, training, and ongoing ontology and data modeling support.

Professional services contracts typically include the provision of on-demand professional services for the duration of the contractual term.

These services are typically coterminous with a Palantir Cloud subscription or the On-Premises Software.

Professional services are on-demand, whereby the Company performs services throughout the contract period;

therefore, the revenue is recognized over the contractual term.

Professional services contracts typically include the provision of on-demand professional services for the duration of the contractual term, which may be coterminous or non-coterminous with a Palantir Cloud subscription or the On-Premises Software.

Professional services are on-demand, whereby the Company performs services throughout the service period;

therefore, the revenue is recognized over the related term.

Contract Liabilities

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however, the Company’s terms generally require payment within 30 to 60 days from the invoice date.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

effects of a significant financing component as the Company expects, at contract inception, that the period between when promised goods and services are transferred to the customer and when the customer pays for those goods and services will be one year or less.

In instances where the timing of revenue recognition differs from the timing of payment, the Company elected to apply the practical expedient in accordance with ASC 606 to not adjust contract consideration for the effects of a significant financing component as the Company expects, at contract inception, that the period between when promised goods and services are transferred to the customer and when the customer pays for those goods and services will be one year or less.

As such, the Company determined its contracts do not generally contain a significant financing component.

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Costs to fulfill contracts were not material in the periods presented.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Software Development Costs

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Cost of Revenue

Cost of revenue primarily includes salaries, stock-based compensation expense, and benefits for personnel involved in performing O&M and professional services, as well as field service representatives, third-party cloud hosting services, travel costs, allocated overhead, and other direct costs.

Cost of revenue primarily includes salaries, stock-based compensation expense, and benefits for personnel involved in performing O&M and professional services, as well as subcontractor expenses, field-service representatives, third-party cloud hosting services, hardware costs, travel costs, allocated overhead, and other direct costs.

Sales and Marketing Costs

Sales and marketing costs primarily include salaries, stock-based compensation expense, commissions, and benefits for the sales force and personnel involved in sales functions, executing on pilots, including bootcamps, and performing other brand building and customer growth activities, as well as third-party cloud hosting services for pilots, marketing and sales event-related costs, travel costs, and allocated overhead.

Sales and marketing costs primarily include salaries, stock-based compensation expense, variable compensation, including commissions, and benefits for the sales force and personnel involved in sales functions, executing on pilots, including bootcamps, and customer growth activities, as well as third-party cloud hosting services for pilots, marketing and sales event-related costs, travel costs, and allocated overhead.

The Company generally charges all such costs to sales and marketing expense in the period incurred.

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Commitments and Contingencies

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Liabilities for loss contingencies arising from claims, disputes, legal proceedings, fines and penalties, and other sources are recorded when it is probable that a liability has been or will be incurred and the amount of the liability can be reasonably estimated.

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Recoveries of such legal costs from insurance policies are recorded as an offset to legal expenses in the period they are received.

Share Repurchase Program

Share repurchases are recorded on the trade date and the repurchase price is inclusive of any related fees and commissions.

Shares of Class A common stock repurchased by the Company are immediately retired and upon retirement, the par value of the Class A common stock repurchased is deducted from common stock with the excess of repurchase price recorded to additional paid-in capital on the Company’s consolidated balance sheets.

Stock-Based Compensation

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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 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.

For RSUs, 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 .

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.

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.

Performance-Based Vesting

The Company recognizes forfeitures as they occur.

Service-Based Awards

The Company grants awards, including RSUs, stock option awards, and SARs, which vest based upon the satisfaction of a service condition.

For such awards, the Company records stock-based compensation expense on a straight-line basis over the requisite service periods.

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.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Performance-Based Awards

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 performance-based RSUs granted after the Direct Listing (“P-RSUs”), 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.

The probability of achievement is assessed periodically to determine whether the performance metric continues to be probable.

When there is a change in the assessment of the probability of achievement, any cumulative effect of the change is recognized in the period of the change and any remaining expense of the related awards is amortized over the remaining service period.

Employee Benefit Plan

The Company sponsors a 401(k) tax-deferred savings plan for all employees who meet certain eligibility requirements.

Participants may contribute, on a pretax and post-tax basis, a percentage of their qualifying annual compensation, but not to exceed a maximum contribution amount pursuant to Section 401(k) of the Internal Revenue Code.

The Company may make additional matching contributions on behalf of the participants.

The Company did not make matching contributions for the years ended December 31, 2023, 2022, and 2021.

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 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 the grant date 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.

The Company estimates its current tax expense together with assessing temporary differences resulting from differing treatment of items not currently deductible for tax purposes.

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Accordingly, the realization of the Company’s deferred tax assets is dependent on future taxable income against which these deductions, losses, and credits can be utilized.

The Company evaluates the realizability of its deferred tax assets and recognizes a valuation allowance when it is more likely than not that a future benefit on such deferred tax assets will not be realized.

The Company considers all evidence, both positive and negative, in determining any required valuation allowance and evaluates the need for a valuation allowance on a regular basis.

The Company performs an assessment of both positive and negative evidence when determining whether it is more likely

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

than not that deferred tax assets are recoverable.

Such assessment is required on a jurisdiction by jurisdiction basis.

The Company reviews the recognition of deferred tax assets on a regular basis to determine if realization of such assets is more likely than not.

A valuation allowance is provided when it is more likely than not that such assets will not be realized.

The Company evaluates the realizability of its deferred tax assets on a regular basis and recognizes a valuation allowance when it is more likely than not that a future benefit on such deferred tax assets will not be realized.

During such evaluation, the Company weighs all available positive and negative evidence, including temporary and permanent differences by jurisdiction, especially those related to excess tax benefits from stock-based compensation, scheduled reversals of deferred tax liabilities, its earning history and results of operations, and tax planning strategies.

Additionally, the Company evaluates its projected future results of business operations, considering any uncertainty in future operating results relative to historical results, volatility in the market price and performance of the Company’s Class A common stock over time, variable macroeconomic conditions impacting the Company’s ability to forecast future taxable income, and changes in business that may affect the existence and magnitude of future taxable income.

If certain factors change and the Company determines that the deferred tax assets are realizable at a more-likely-than not level, it will adjust the valuation allowance in the period the determination is made.

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and has elected to treat taxes on future GILTI inclusions as current period expense if and when incurred.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Net Earnings (Loss) Per Share Attributable to Common Stockholders

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A noncontrolling interest represents the proportionate equity interest in a subsidiary that is not attributable, either directly or indirectly, to the Company and is reported as equity of the Company, separate from the Company’s controlling interest.

Revenues, expenses, gains, losses, net income (loss), and other comprehensive income (loss) are reported in the consolidated financial statements at the consolidated amounts, which include the amounts attributable to both the controlling and noncontrolling interest.

Foreign Currency

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Transaction gains and losses from the remeasurement are recognized in other income (expense), net within the consolidated statements of operations.

Recent Accounting Pronouncements Not Yet Adopted

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

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This standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements.

The Company is currently evaluating the impacts of the new standard.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

The Company adopted the guidance during the year ended December 31, 2024, and applied it retrospectively to the periods presented.

Segment and Geographic Information for more information.

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes – Improvements to Income Tax Disclosures , requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid.

This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted.

The Company is currently evaluating the impacts of the new standard.

The Company is currently evaluating the impacts of the new standard on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures, which requires the disclosure of additional information about specific expense categories in the notes to the consolidated financial statements on an annual and interim basis.

The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027 on either a prospective or retrospective basis, with early adoption permitted.

The Company currently evaluating the impacts of the new standard on its consolidated financial statements.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Contract Liabilities and Remaining Performance Obligations

1 unchanged sentence

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

As of December 31, 2023 and 2022, the Company’s contract liability balances were $ 486.3 million and $ 339.2 million, respectively.

Revenue of $ 329.4 million and $ 384.3 million was recognized during the years ended December 31, 2023 and 2022, respectively, that was included in the contract liabilities balances as of December 31, 2022 and 2021, respectively.

As of December 31, 2024 and 2023, the Company’s contract liabilities were $ 566.4 million and $ 486.3 million, respectively.

Revenue of $ 457.6 million and $ 329.4 million was recognized during the years ended December 31, 2024 and 2023, respectively, that was included in the contract liabilities as of December 31, 2023 and 2022, respectively.

Remaining Performance Obligations

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Money market funds $ 1,823,046 $ 1,823,046 $ — $ —

treasury securities 10,079 — 10,079 —

Certificates of deposit 938 — 938 —

Prepaid expenses and other current assets and other assets:

10 unchanged sentences

Money market funds $ 576,565 $ 576,565 $ — $ —

U.S Treasury securities 10,079 — 10,079 —

Certificates of deposit 938 — 938 —

2 unchanged sentences

Marketable securities:

Treasury securities 2,824,861 — 2,824,861 —

Publicly-traded equity securities 18,271 18,271 — —

5 unchanged sentences

Debt Securities

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

As of December 31, 2024

Amortized Cost Unrealized Gains Unrealized Losses Fair Value

Treasury securities $ 3,110,278 $ 1,022 $ ( 613 ) $ 3,110,687

Total debt securities $ 3,110,278 $ 1,022 $ ( 613 ) $ 3,110,687

As of December 31, 2023, available-for-sale debt securities consisted of the following (in thousands):

5 unchanged sentences

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

The Company sold $ 694.6 million of available-for-sale debt securities during the fiscal year ended December 31, 2023 and immediately reinvested such proceeds into additional available-for-sale debt securities.

The Company did not sell any available-for-sale debt securities during the fiscal years ended December 31, 2024 or 2022.

The Company sold $ 694.6 million of available-for-sale debt securities during the fiscal year ended December 31, 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 available-for sale debt securities were recorded as of December 31, 2023.

As of December 31, 2023, available-for-sale debt securities of $ 236.0 million were in an unrealized loss position primarily due to unfavorable changes in interest rates subsequent to initial purchase.

None of the available-for-sale debt securities held as of 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 December 31, 2023.

All of the Company’s U.S.

treasury securities had contractual maturities due within one year as of December 31, 2023.

As of December 31, 2022, the Company held an immaterial amount of debt securities.

Equity Securities

The Company has equity securities consisting of shares held in publicly-traded companies, which are recorded at fair market value each reporting period within marketable securities in the consolidated balance sheets.

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

Total equity securities received as noncash consideration was $ 41.7 million, $ 6.8 million, and an immaterial amount during the years ended December 31, 2023, 2022, and 2021, respectively.

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

During the years ended December 31, 2022 and 2021, the Company recorded net unrealized losses of $ 159.0 million and $ 72.8 million, respectively, and realized losses of $ 113.1 million and an immaterial amount during the years ended December 31, 2022 and 2021, respectively, for its publicly-traded equity securities.

For the years ended December 31, 2023,

No credit or non-credit losses related to available-for sale debt securities were recorded as of December 31, 2024 or 2023.

As of December 31, 2024 and 2023, available-for-sale debt securities of $ 716.3 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 December 31, 2024 or 2023 were in a continuous unrealized loss position for greater than 12 months.

The decline in fair value below amortized cost basis was not attributed to credit-related factors and it is more likely than not that the Company will hold the securities until maturity or a recovery of the cost basis.

No credit-related

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

2022, and 2021 net unrealized losses from publicly-traded equity securities held at the end of each period were $ 4.5 million, $ 197.3 million, and $ 72.8 million respectively.

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

impairment losses were recorded as of December 31, 2024 or 2023.

All of the Company’s U.S.

Treasury securities had contractual maturities due within one year as of December 31, 2024 and 2023.

Equity Securities

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

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

For the year ended December 31, 2024, net unrealized gains from publicly-traded equity securities held at the end of the period were immaterial.

For the years ended December 31, 2023, and 2022 net unrealized losses from publicly-traded equity securities held at the end of each period were $ 4.5 million, and $ 197.3 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 December 31, 2024 and December 31, 2023, the total amount of privately-held equity securities included in other assets on the consolidated balance sheets was $ 64.9 million and $ 32.6 million, respectively.

1 unchanged sentence

The Company did not record any material adjustments or impairments for the privately-held equity securities held as of December 31, 2024 and December 31, 2023.

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

Total equity securities received as noncash consideration was $ 58.7 million, $ 41.7 million, and $ 6.8 million during the years ended December 31, 2024, 2023, and 2022, 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”).

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

No Investments were purchased under such Investment Agreements during the fiscal year ended December 31, 2023.

No Investments were purchased under such Investment Agreements during the fiscal years ended December 31, 2024 or 2023.

In connection with signing the Investment Agreements, each Investee or an associated entity and the Company entered into a commercial contract for access to the Company’s products and services (collectively, the “Strategic Commercial Contracts”).

The Company assesses the concurrent agreements under the noncash and consideration paid or payable to a customer guidance within ASC 606, Revenue from Contracts with Customers, as well as the commercial substance of each arrangement considering the customer’s ability and intention to pay as well as the Company’s obligation to perform under each contract.

As currently assessed, the total value of Strategic Commercial Contracts was $ 376.5 million as of December 31, 2023, which is inclusive of $ 40.4 million of contractual options.

The original terms of the Strategic Commercial Contracts with remaining deal value as of December 31, 2023, including contractual options, range from two years to seven years and are subject to termination for cause provisions.

The Company assessed the concurrent agreements under the noncash consideration and consideration payable to a customer guidance within ASC 606, Revenue from Contracts with Customers, as well as the commercial substance of each arrangement considering the customer’s ability and intention to pay as well as the Company’s obligation to perform under each contract.

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.

As of December 31, 2023, the cumulative amount of revenue recognized from Strategic Commercial Contracts was $ 253.9 million, of which $ 87.3 million of revenue was recognized during the year ended December 31, 2023.

Alternative Investments

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

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

During the years ended December 31, 2024, 2023, and 2022, revenue recognized from Strategic Commercial Contracts was $ 52.3 million, $ 87.3 million, and $ 118.4 million, respectively.

Balance Sheet Components

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Certain lease agreements contain renewal options, rent abatement, and escalation clauses that are factored into our determination of lease payments when appropriate.

The Company's leases have remaining terms up to December 2033, some of which include one or more options to extend.

The Company's leases have remaining terms up to October 2034, some of which include one or more options to extend.

Additionally, some lease contracts include termination options.

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Total operating lease liabilities $ 239,219 $ 86,223 $ 152,996

The weighted-average remaining lease term related to the Company’s operating lease liabilities as of December 31, 2023 and 2022 was six years and seven years , respectively.

The weighted-average discount rate related to the Company’s operating lease liabilities as of December 31, 2023 and 2022 was 6 %.

The weighted-average remaining lease term related to the Company’s operating lease liabilities as of December 31, 2024 and 2023 was seven years and six years , respectively.

The weighted-average discount rate related to the Company’s operating lease liabilities as of December 31, 2024 and 2023 was 7 % and 6 %, respectively.

The following table sets forth the supplemental information related to the Company's operating leases for the years ended December 31, 2024 and 2023 (in thousands):

6 unchanged sentences

Purchase Commitments

The Company has commitments with various third parties to purchase primarily cloud hosting services.

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

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

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

As of December 31, 2023, the Company had satisfied $ 40.7 million of the $ 154.0 million commitment amount for the contract year beginning October 1, 2023 and ending September 30, 2024.

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 December 31, 2024, the Company satisfied $ 55.7 million of its $ 160.2 million commitment for the contract year beginning October 1, 2024 and ending September 30, 2025.

Palantir Technologies Inc.

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1:22-cv-02834-CNS-SKC, consolidated with civil actions 1:22-cv-02805-CNS-SKC and 1:22-cv-02893-CNS-SKC.

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.

Karp, et al., Case No.

22-cv-3028 and Parmenter v.

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

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.

Karp, et al., Case No.

5 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 December 31, 2024, the Company was not aware of any currently pending legal matters or claims, individually or in the aggregate, that are expected to have a material adverse impact on its consolidated financial statements.

35 unchanged sentences

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

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

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

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

During the year ended December 31, 2023, the Company did not repurchase any shares of its Class A common stock under the Share Repurchase Program.

During the year ended December 31, 2024, the Company repurchased and subsequently retired 2.1 million shares of its Class A common stock for an aggregate amount, including commissions, of $ 64.2 million under the Share Repurchase Program.

As of December 31, 2024, approximately $ 935.8 million of the originally authorized amount under the Share Repurchase Program remained available for future repurchases.

Stock-Based Compensation

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In September 2020, prior to the Direct Listing, the Company’s Board of Directors approved the 2020 Equity Incentive Plan (“2020 Plan”).

The 2020 Plan provides for the grant of incentive stock options (“ISOs”), NSOs, restricted stock, RSUs, stock appreciation rights (“SARs”), and performance awards to the Company’s employees, directors, and consultants.

The 2020 Plan provides for the grant of incentive stock options (“ISOs”), NSOs, restricted stock, RSUs, SARs, and performance awards to the Company’s employees, directors, and consultants.

A total of 150,000,000 shares of the Company’s Class A common stock were initially reserved for issuance pursuant to the 2020 Plan.

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Options and other equity awards become vested and, if applicable, exercisable based on terms determined by the Board of Directors or another plan administrator on the date of grant, which is typically four years for new employees and varies for subsequent grants.

Stock Options

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

Options Outstanding Weighted-Average Exercise Price Per Share

Stock Options and SARs

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

Options Outstanding SARs Outstanding

Number of Awards Weighted-Average Exercise Price Per Share

Weighted-Average

Remaining Contractual Life (years) Aggregate Intrinsic Value

Number of Awards Weighted-Average Exercise Price Per Share

Weighted-Average

Remaining Contractual Life (years) Aggregate Intrinsic Value

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

Options exercised ( 46,079 ) 4.74

Options canceled and forfeited ( 2,364 ) 5.39

Granted — — 51,620 50.73

Exercised ( 99,297 ) 7.51 ( 41,023 ) 50.00

Canceled and forfeited ( 1,064 ) 5.78 ( 4,160 ) 50.19

Balance as of December 31, 2024 178,109 $ 9.26 6.9 $ 11,821,740 6,437 $ 55.75 6.7 $ 127,976

Options vested and exercisable as of December 31, 2023 160,877 $ 6.66 6.93 $ 1,691,404

The aggregate intrinsic value of options outstanding, and vested and exercisable is calculated as the difference between the exercise price of the underlying options and the fair value of the Company’s common stock as of December 31, 2023.

The aggregate intrinsic value of options exercised during the years ended December 31, 2023, 2022, and 2021 was $ 476.8 million, $ 112.3 million, and $ 3.8 billion, respectively, and is calculated based on the difference between the exercise price and the fair value of the Company’s common stock on the exercise date.

Vested and exercisable as of December 31, 2024 80,155 $ 6.66 6.0 $ 5,528,204 — $ — 0.0 $ —

The aggregate intrinsic value of options and SARs outstanding, as well as those which are vested and exercisable, is calculated as the difference between the exercise price of the underlying options and the fair value of the Company’s common stock as of the respective periods presented, accounting for the maximum appreciation of an award, as applicable.

The aggregate intrinsic value of options exercised during the years ended December 31, 2024, 2023, and 2022 was $ 3.8 billion, $ 476.8 million, and $ 112.3 million, respectively, and is calculated based on the difference between the exercise price and the fair value of the Company’s common stock on the exercise date.

The aggregate intrinsic value of SARs exercised during the year ended December 31, 2024 was $ 707.9 million.

SARs exercised during the years ended December 31, 2023 and 2022 were not material.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

There were no options granted during the years ended December 31, 2024, 2023, and 2022.

The total grant-date fair value of options that vested during the years ended December 31, 2023, 2022, and 2021 was $ 131.0 million, $ 170.8 million, and $ 189.5

The total grant-date fair value of options that vested during the years ended December 31, 2024, 2023, and 2022 was $ 107.7 million, $ 131.0 million, and $ 170.8 million, respectively .

The weighted-average grant-date fair value of SARs granted during the year ended December 31, 2024 was $ 4.08 per share.

The total grant-date fair value of SARs that vested during the year ended December 31, 2024 was $ 138.8 million.

No SARs were vested in the years ended December 31, 2023 or 2022.

As of December 31, 2024, the total unrecognized stock-based compensation expense related to options and SARs outstanding was $ 500.4 million and $ 54.8 million, respectively, which is expected to be recognized over a weighted-average service period of six and seven years , respectively.

Market-Vesting SARs

During the year ended December 31, 2024, the Company granted Market-Vesting SARs that vest upon the satisfaction of a market-based vesting condition and are subject to continued service.

During the three months ended December 31, 2024, the market-based vesting condition was satisfied and all Market-Vesting SARs were vested when the price per share of the Company’s Class A common stock exceeded $50 within an open trading window (measured based on the closing price on the immediately prior trading day) (an “Above Price Day”).

The Company immediately accelerated $ 115.8 million of stock-based compensation expense as the SARs vested prior to their grant date derived service period.

Following the satisfaction of such condition, Market-Vesting SARs could only be exercised on an Above Price Day, up to the maximum appreciation of $ 20 per Market-Vesting SAR.

During the three months ended December 31, 2024, all outstanding Market-Vesting SARs were exercised.

The related employee withholding taxes were funded by net share settlement, where shares withheld by the Company are reflected as a reduction to additional paid in capital.

When the related employee withholding taxes are remitted, they are presented as cash outflows for financing activities.

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 year ended December 31, 2024, the assumptions used in the Monte Carlo simulation model included the following:

December 31, 2024

Expected volatility rate 55.2 % - 58.9 %

Risk-free interest rate 4.1 % - 4.7 %

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

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.

Time-Vesting SARs

During the year ended December 31, 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 (“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:

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

million, respectively .

As of December 31, 2023, the total unrecognized stock-based compensation expense related to options outstanding was $ 599.1 million, which is expected to be recognized over a weighted-average service period of seven years .

December 31, 2024

Expected volatility rate 54.9 % - 59.2 %

Expected term (in years) 3.7 - 9.2

Risk-free interest rate 3.4 % - 3.9 %

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 year ended December 31, 2024 (in thousands, except per share amounts):

Units Outstanding Weighted Average Grant Date Fair Value per Share Units Outstanding Weighted Average Grant Date Fair Value per Share

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

Unvested and outstanding as of December 31, 2023 82,262 $ 10.71 1,976 $ 15.39

1 unchanged sentence

Vested ( 31,989 ) 13.65 ( 3,654 ) 20.52

Canceled ( 8,674 ) 11.08 — —

Canceled and forfeited ( 4,135 ) 15.31 ( 512 ) 11.29

Adjustment for performance results achieved (1)

— $ — ( 1,569 ) $ 18.90

Unvested and outstanding as of December 31, 2024 65,236 $ 14.89 577 $ 41.93

During the fiscal year ended December 31, 2023, the Company granted RSUs that have only a service-based vesting condition, as well as those that have both service-based and performance-based vesting conditions (“P-RSUs”).

(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.

During the fiscal year ended December 31, 2024, the Company granted RSUs that have only a service-based vesting condition, as well as P-RSUs that have both service-based and performance-based vesting conditions.

The service-based vesting condition for each is generally satisfied upon continued service through a specified date.

Vesting periods for the RSUs and P-RSUs are generally up to 4 years and three months , respectively.

Vesting periods for the RSUs and P-RSUs are generally up to four years and three months , respectively.

The performance-based vesting condition is satisfied upon the achievement of certain Company performance goals set by the Compensation Committee of the Board of Directors.

1 unchanged sentence

The total grant-date fair value of RSUs vested during the years ended December 31, 2024, 2023, and 2022 was $ 436.6 million, $ 526.1 million, and $ 453.2 million, respectively.

The total grant-date fair value of P-RSUs vested during the year ended December 31, 2024 was $ 75.0 million.

No P-RSUs were vested in the years ended December 31, 2023 or 2022.

As of December 31, 2024, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $ 711.4 million, which is expected to be recognized over a weighted-average service period of three years .

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

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Stock-based Compensation Expense

8 unchanged sentences

The Company did not recognize any tax benefits related to stock-based compensation expense during the years ended December 31, 2024, 2023, or 2022.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Income (loss) before provision for income taxes consisted of the following (in thousands):

15 unchanged sentences

Total provision for income taxes $ 21,255 $ 19,716 $ 10,067

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

A reconciliation of the expected tax provision at the statutory federal income tax rate to the Company’s recorded tax provision consisted of the following (in thousands):

15 unchanged sentences

Total provision for income taxes $ 21,255 $ 19,716 $ 10,067

For the year ended December 31, 2024, the Company recorded a provision for income taxes of $ 21.3 million compared to $ 19.7 million for the year ended December 31, 2023, primarily due to the increased foreign tax expense as the result of higher foreign taxable income and withholding taxes.

For the year ended December 31, 2023, the Company recorded a provision for income taxes of $ 19.7 million compared to $ 10.1 million for the year ended December 31, 2022, primarily due to the increase in foreign income taxes as the result of higher foreign taxable income and higher foreign withholding taxes in the current year.

The Company maintains a full valuation allowance against its U.S.

federal and state, and certain foreign deferred tax assets.

For the year ended December 31, 2022, the Company recorded a provision for income taxes of $ 10.1 million compared to $ 31.9 million for the year ended December 31, 2021, primarily due to the prior year establishment of a full valuation allowance

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

against its U.K.

deferred tax assets during the fourth quarter of 2021 partially offset by permanent differences associated with U.S.

Base Erosion and Anti Abuse Tax elections.

The Company maintains a full valuation allowance against its U.S.

federal and state and certain foreign deferred tax assets.

Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis using enacted tax rates in effect for the year in which the differences are expected to reverse.

10 unchanged sentences

Gross deferred tax assets 2,759,904 2,145,337

Outside basis difference — ( 6,512 )

Acquisition related intangibles ( 6,827 ) ( 8,428 )

3 unchanged sentences

Net deferred tax assets (liabilities) $ ( 7,524 ) $ ( 8,063 )

Because of the Company’s history of U.S.

and certain foreign net operating tax losses, primarily in the U.K., the Company has maintained a full valuation allowance against potential future benefits for U.S, federal, state, and certain foreign deferred tax assets as of December 31, 2023.

The valuation allowance totaled $ 2.1 billion for the years ended December 31, 2023 and 2022.

The Company reviews the recognition of deferred tax assets on a regular basis to determine if realization of such assets is more likely than not.

Due to the weight of objectively verifiable negative evidence, including the Company’s history of U.S.

and certain foreign net operating tax losses, primarily in the U.K., the Company has continued to maintain a full valuation

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

allowance against potential future benefits for U.S, federal, state, and certain foreign deferred tax assets as of December 31, 2024.

The Company will release the valuation allowance when there is sufficient positive evidence to support a conclusion that it is more likely than not the future benefit on such deferred tax assets will be realized.

Although the Company has achieved positive cumulative income before provision for income taxes in the U.S.

over the past three years, when adjusting for permanent differences, primarily related to excess tax benefits from stock-based compensation, the outcome resulted in a cumulative tax loss position for that period.

The future timing and amount of such valuation allowance being released is uncertain based on the Company’s future assessment of all available evidence, including its recent earnings and anticipated future earnings, expected temporary and permanent differences, especially those related to excess tax benefits from stock-based compensation, scheduled reversals of deferred tax liabilities, and tax planning strategies.

As such, there is a reasonable possibility that the Company may have sufficient positive evidence in the future to release all or a portion of the valuation allowance it recorded against its deferred tax assets.

The release of all, or a portion, of the valuation allowance would result in the recognition of certain deferred tax assets and may result in a material decrease to income tax expense for the period the release is recorded.

The valuation allowance totaled $ 2.7 billion and $ 2.1 billion for the years ended December 31, 2024 and 2023, respectively.

The valuation allowance on our net deferred tax assets increased by $ 608.1 million and $ 50.6 million during the years ended December 31, 2024 and 2023, respectively.

Such increase was primarily a result of an increase in excess tax benefits from permanent differences related to excess tax benefits from stock-based compensation, partially offset by an increase in income before provision for income taxes in the U.S.

Provisions enacted by the 2017 Tax Cuts and Jobs Act related to the capitalization for tax purposes of research and experimental (“R&E”) expenditures became effective on January 1, 2022.

1 unchanged sentence

As a result of this enactment, the Company began capitalizing and amortizing R&E expenditures over five years for domestic research and 15 for foreign research rather than expensing these costs as incurred during fiscal year ended December 31, 2022.

The Company has recorded a deferred tax asset of $ 214.8 million as of December 31, 2023 related to the capitalization requirement.

The Company has recorded a deferred tax asset of $ 504.2 million as of December 31, 2024 compared to $ 214.8 million as of December 31, 2023 related to the capitalization requirement.

As of December 31, 2024, the Company had U.S.

9 unchanged sentences

The annual limitation may result in the expiration of the net operating loss and research and development credit carryforwards before utilization.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

As of December 31, 2024, the Company had U.S.

4 unchanged sentences

As of December 31, 2024, the Company had foreign net operating losses, primarily in the U.K., of approximately $ 946.2 million.

As of December 31, 2023, the Company had foreign net operating losses, primarily in the U.K., of approximately $ 464.7 million.

These net operating losses can be carried forward indefinitely.

2 unchanged sentences

income taxes and foreign withholding tax on these earnings.

On August 16, 2022, the U.S.

enacted the Inflation Reduction Act of 2022, which, among other things, implements a 15% minimum tax on book income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy.

Based on the Company’s current analysis of the provisions, the Company does not believe this legislation will have a material impact on its 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 income and a 1% excise tax on the value of net share repurchases.

The Inflation Reduction Act became effective beginning in fiscal year 2023.

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

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

The Company has considered the impact of the new Organization for Economic Co-operation and Development (“OECD”) global minimum tax provision (“Pillar 2”) rules and has determined that the Pillar 2 rules were applicable to the Company starting January 1, 2024.

Based on the Company’s current analysis of Pillar Two provisions, these tax law changes did not have a material impact on the Company’s consolidated financial statements.

Uncertain Tax Positions

33 unchanged sentences

Diluted $ 0.19 $ 0.09 $ ( 0.18 )

Diluted net earnings (loss) per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method.

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

5 unchanged sentences

Total — 175,245 466,381

As of December 31, 2024, the Company had 6.4 million Time-Vesting SARs outstanding, of which, the maximum number of potentially dilutive Class A common shares upon vesting would be the fraction that equals the maximum appreciation divided by the Company’s Class A common stock price at that time.

Segment and Geographic Information

10 unchanged sentences

2024 2023 2022

Government $ 1,222,215 $ 1,071,776 $ 897,356

Commercial 1,002,797 834,095 644,533

Total revenue $ 2,225,012 $ 1,905,871 $ 1,541,889

Years Ended December 31,

2023 2022 2021

Amount % Amount % Amount %

Contribution:

Government $ 724,970 59 % $ 620,677 58 % $ 541,883 60 %

Commercial 520,585 52 % 414,496 50 % 357,546 55 %

Government revenue $ 1,569,605 $ 1,222,215 $ 1,071,776

Expenses attributable to government segment ( 621,165 ) ( 497,245 ) ( 451,099 )

Government contribution 948,440 60 % 724,970 59 % 620,677 58 %

Commercial revenue 1,295,902 1,002,797 834,095

Expenses attributable to commercial segment ( 524,394 ) ( 482,212 ) ( 419,599 )

Commercial contribution 771,508 60 % 520,585 52 % 414,496 50 %

Total contribution $ 1,719,948 60 % $ 1,245,555 56 % $ 1,035,173 54 %

3 unchanged sentences

Income (loss) from operations $ 310,403 $ 119,966 $ ( 161,201 )

$ 119,966 $ ( 161,201 ) $ ( 411,046 )

Research and development expenses (1)

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Total property and equipment, net $ 39,638 100 % $ 47,758 100 %

Business Combinations

On November 8, 2022, the Company gained the right to majority representation on the board of directors of Palantir Japan, thereby obtaining a controlling interest.

Prior to obtaining a controlling interest, the Company accounted for its 50 % ownership in Palantir Japan as an equity method investment, which was created to distribute Palantir platforms to the Japanese market.

This transaction was accounted for as a “step acquisition” (as defined by U.S.

GAAP), as such, the Company remeasured its pre-existing equity interest in Palantir Japan immediately prior to the completion of the acquisition to its estimated fair value.

The results of Palantir Japan have been included in the Company’s consolidated financial statements since the acquisition date, with the portion outside of its control forming a noncontrolling interest.

The fair value of Palantir Japan on the acquisition date totaled $ 149.0 million, which included the Company’s equity interest immediately prior to the acquisition of $ 74.5 million and the noncontrolling interest of $ 74.5 million.

The amounts recognized of assets acquired and liabilities assumed as of the acquisition date included:

cash of $ 66.7 million;

goodwill of $ 36.1 million;

intangible assets of $ 34.7 million related to customer relationships, reacquired rights, and backlog;

$ 32.5 million of other identifiable assets;

and $ 21.0 million of net liabilities.

The intangible assets are reported in other assets and are being amortized over a period of two to seven years in accordance with the underlying pattern of economic benefit reflected by the future net cash flows.

Goodwill is reported in other assets and is primarily attributed to the value expected from synergies resulting from the Palantir Japan acquisition.

None of the goodwill recognized is expected to be deductible for income tax purposes.

In accordance with accounting for a step acquisition, the Company recognized a gain of $ 44.3 million during the year ended December 31, 2022 as a result of remeasuring its pre-existing interest in Palantir Japan held immediately before the business combination, which was included in other income (expense), net in the consolidated statements of operations.

Intangible Assets

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Total intangible assets $ 38,943 $ ( 20,885 ) $ 18,058 $ 38,943 $ ( 13,041 ) $ 25,902

Amortization expense of intangible assets was $ 9.6 million and not material for the years ended December 31, 2023 and 2022, respectively.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Amortization expense of intangible assets was $ 7.8 million and $ 9.6 million for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, expected amortization expense for the unamortized finite-lived intangible assets for the next five years and thereafter is as follows (in thousands):

Year ended December 31, Amount

Thereafter 2,097

Total $ 18,058

Related Party Transactions

Alexander Karp, the Company’s Chief Executive Officer, flies on non-commercial aircraft for business and personal travel.

In the fiscal year 2024, Mr.

Karp began to use an aircraft beneficially owned by him (the “Executive Aircraft”) for such travel.

During the year ended December 31, 2024, the Company incurred expenses related to the use of the Executive Aircraft of $ 7.7 million.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data