What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-17 compared with 2025-02-18 · 230 added, 277 removed, 824 unchanged (38% of the section changed)

3 unchanged sentences

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss )

Consolidated Statements of Comprehensive Income

Consolidated Statements of Equity

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

(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”).

(the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S.

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Management applies significant judgment in identifying and evaluating any non-standard terms and conditions in customer arrangements which may impact the determination of performance obligations or the timing of revenue recognition.

In addition, determining whether promises are distinct performance obligations that should be accounted for separately – or not distinct within the context of the contract and, thus, accounted for together – requires significant judgment.

The Company concluded that the promise to provide a software license is highly interdependent and interrelated with the promise to provide O&M services and such promises are not distinct within the context of its contracts and are accounted for as a single performance obligation for the Company’s On-Premises Software.

Auditing revenue recognition was complex and required a significant level of auditor judgment to identify and evaluate non-standard terms and conditions that impact revenue recognition and to assess whether the software licenses and O&M services should be accounted for as distinct performance obligations or combined as a single performance obligation.

Auditing revenue recognition was complex and required a significant level of auditor judgment to identify and evaluate non-standard terms and conditions that impact revenue recognition.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls to identify and evaluate terms and conditions and performance obligations in customer arrangements that would impact revenue recognition.

Our substantive procedures included, among others, testing the completeness and accuracy of management’s identification and evaluation of non-standard terms and conditions, reading executed contracts for a sample of revenue transactions, and evaluating whether the Company appropriately applied its revenue recognition policy to the arrangements based on the terms and conditions therein and consistent with U.S.

In addition, we evaluated management’s key assumptions and analysis of its performance obligations, including their assessment of the nature, interdependency, and level of integration between the software license and O&M services.

We also evaluated the appropriateness of the related disclosures in the consolidated financial statements.

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, 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, 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.

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, 2025 and 2024, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated February 17, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

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Total operating expenses 2,272,254 1,989,114 1,673,941

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

Income from operations 1,414,015 310,403 119,966

Interest income 229,181 196,792 132,572

Other income (expense), net 14,172 ( 18,022 ) ( 15,447 )

Income (loss) before provision for income taxes 489,173 237,091 ( 361,027 )

Income before provision for income taxes 1,657,368 489,173 237,091

Provision for income taxes 22,724 21,255 19,716

Net income (loss) 467,918 217,375 ( 371,094 )

Net income 1,634,644 467,918 217,375

Net income attributable to noncontrolling interests 9,611 5,728 7,550

Net income (loss) attributable to common stockholders $ 462,190 $ 209,825 $ ( 373,705 )

Net earnings (loss) per share attributable to common stockholders, basic $ 0.21 $ 0.10 $ ( 0.18 )

Net earnings (loss) per share attributable to common stockholders, diluted $ 0.19 $ 0.09 $ ( 0.18 )

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

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

Net income attributable to common stockholders $ 1,625,033 $ 462,190 $ 209,825

Earnings per share attributable to common stockholders, basic $ 0.69 $ 0.21 $ 0.10

Earnings per share attributable to common stockholders, diluted $ 0.63 $ 0.19 $ 0.09

Weighted-average shares of common stock outstanding used in computing earnings per share attributable to common stockholders, basic 2,369,612 2,250,163 2,147,446

Weighted-average shares of common stock outstanding used in computing earnings per share attributable to common stockholders, diluted 2,565,197 2,450,818 2,297,927

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

Palantir Technologies Inc.

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Income

(in thousands)

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2025 2024 2023

Net income (loss) $ 467,918 $ 217,375 $ ( 371,094 )

Other comprehensive income (loss)

Net income $ 1,634,644 $ 467,918 $ 217,375

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments 10,938 ( 3,386 ) 2,699

Net unrealized gain (loss) on available-for-sale securities 8,615 ( 3,026 ) 3,435

Comprehensive income (loss) 461,506 223,509 ( 374,078 )

Comprehensive income 1,654,197 461,506 223,509

Comprehensive income attributable to noncontrolling interests 9,611 5,728 7,550

Comprehensive income (loss) attributable to common stockholders $ 455,778 $ 215,959 $ ( 376,689 )

Comprehensive income attributable to common stockholders $ 1,644,586 $ 455,778 $ 215,959

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

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(in thousands)

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

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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 income — — — 6,134 — 6,134 — 6,134

Other, net — — — — — — 743 743

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

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

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Issuance of common stock from the exercise of stock options 25,739 25 129,082 — — 129,107 — 129,107

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 ) — — — — —

Issuance of common stock upon release of RSUs and P-RSUs 27,259 27 ( 27 ) — — — — —

Repurchases of common stock ( 601 ) — ( 74,985 ) — — ( 74,985 ) — ( 74,985 )

Stock-based compensation — — 685,285 — — 685,285 — 685,285

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

Other comprehensive income — — — 19,553 — 19,553 — 19,553

Net income — — — — 1,625,033 1,625,033 9,611 1,634,644

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Operating activities

Net income (loss) $ 467,918 $ 217,375 $ ( 371,094 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 1,634,644 $ 467,918 $ 217,375

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 26,145 31,587 33,354

Stock-based compensation 684,033 691,638 475,903

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

Unrealized and realized (gain) loss from marketable securities, net 21,228 19,306 13,160

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Other operating activities 15,630 66,034 12,764

Changes in operating assets and liabilities, net of effect of acquisitions:

Changes in operating assets and liabilities:

Accounts receivable, net ( 450,429 ) ( 211,157 ) ( 106,159 )

Prepaid expenses and other current assets 7,202 ( 6,197 ) ( 24,811 )

Other assets 4,681 3,242 6,033

Accounts payable ( 18,841 ) ( 31,832 ) ( 29,859 )

Accrued liabilities 115,634 52,895 5,527

Deferred revenue, current and noncurrent 22,356 79,512 ( 61,154 )

Customer deposits, current and noncurrent 54,440 64,347 ( 49,471 )

Operating lease liabilities, current and noncurrent ( 48,966 ) ( 49,630 ) ( 34,590 )

Other noncurrent liabilities 4,554 58 ( 73 )

Prepaid expenses and other assets 51,979 11,883 ( 2,955 )

Accounts payable and accrued liabilities 4,659 96,793 21,063

Contract liabilities 238,688 76,796 143,859

Other liabilities ( 54,860 ) ( 44,412 ) ( 49,572 )

Net cash provided by operating activities 2,134,473 1,153,865 712,183

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Proceeds from sales and redemption of marketable securities 5,026,315 5,073,507 2,889,268

Purchases of privately-held securities ( 72,924 ) ( 5,615 ) —

Other investing activities ( 1,000 ) — 51,072

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Other financing activities 85 444 601

Net cash provided by financing activities 463,364 218,839 85,996

Net cash provided by (used in) financing activities ( 26,910 ) 463,364 218,839

Effect of foreign exchange on cash, cash equivalents, and restricted cash 7,477 ( 6,745 ) 2,930

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Supplemental disclosures of cash flow information

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

Noncash investing and financing activities

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Certain prior year balances have been reclassified to conform to the current year presentation.

Such reclassifications did not affect total revenues, income (loss) from operations, net income (loss), or cash flows.

Such reclassifications did not affect total revenues, income from operations, net income, or cash flows.

The Company’s fiscal year ends on December 31.

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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, the allowance for credit losses was immaterial and $ 10.5 million as of December 31, 2024 and 2023, respectively.

Based upon the Company’s assessment, the allowance for credit losses was immaterial as of December 31, 2025 and 2024.

Debt Securities

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The Company is exposed to concentrations of credit risk with respect to accounts receivable presented in the consolidated balance sheets.

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

The Company’s accounts receivable balances as of December 31, 2025 and 2024 were $ 1.0 billion and $ 0.6 billion, respectively.

Customer I represented 25 % and 26 % of total accounts receivable as of December 31, 2025 and 2024, respectively, and no other customer represented more than 10% of total accounts receivable as of December 31, 2025 or 2024.

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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.

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.

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

Impairment of Long-Lived Assets

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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

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.

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.

The three-level hierarchy of inputs is as follows:

Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities;

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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

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.

Revenue is generally recognized over the contract term on a ratable basis.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Professional Services

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The Company’s contracts with customers can include multiple promises to transfer goods or services to the customer.

Determining whether promises are distinct performance obligations that should be accounted for separately – or not distinct within the context of the contract and, thus, accounted for together – requires significant judgment.

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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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Accordingly, most costs are charged to research and development expense in the period incurred.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

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 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, 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.

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, and customer growth activities, as well as third-party cloud hosting services for pilots, and marketing and sales event-related costs.

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

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Research and Development Costs

Research and development costs primarily include salaries, stock-based compensation expense, and benefits for personnel involved in performing the activities to develop and refine the Company’s platforms and products, as well as third-party cloud hosting services and other IT-related costs, travel costs, and allocated overhead.

Research and development costs are expensed as incurred.

Commitments and Contingencies

Contingencies

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 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 based on the fair value of the Company’s common stock on the grant date and records stock-based compensation expense using the accelerated attribution method over the service period.

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

For P-RSUs granted after the Direct Listing, the Company recognizes expense 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 determines the grant-date fair value of P-RSUs 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 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.

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

These differences result in deferred tax assets and liabilities on the Company’s consolidated balance sheets, which are estimated based upon the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates that will be in effect when these differences reverse.

In general, deferred tax assets represent future tax benefits to be received when certain expenses previously recognized in the Company’s consolidated statements of operations become deductible expenses under applicable income tax laws or loss or credit carryforwards are utilized.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

deferred tax assets represent future tax benefits to be received when certain expenses previously recognized in the Company’s consolidated statements of operations become deductible expenses under applicable income tax laws or loss or credit carryforwards are utilized.

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.

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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

The Company computes net earnings (loss) per share attributable to its common stockholders using the two-class method required for participating securities, which determines net earnings (loss) per common share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in distributed and undistributed earnings.

Earnings Per Share Attributable to Common Stockholders

The Company computes earnings per share attributable to its common stockholders using the two-class method required for participating securities, which determines earnings per common share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in distributed and undistributed earnings.

The two-class method requires income available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

The rights, including the liquidation and dividend rights, of the holders of Class A, Class B, and Class F common stock (collectively, the “common stock”) are identical, except with respect to voting and conversion.

As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis and the resulting net earnings (loss) per share will, therefore, be the same for all classes of common stock on an individual or comb ined basis.

As such, the Company has presented the net income (loss) attributed to its common stock on a combined basis.

As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis and the resulting earnings per share will, therefore, be the same for all classes of common stock on an individual or comb ined basis.

As such, the Company has presented the net income attributed to its common stock on a combined basis.

Noncontrolling Interests

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 controlling and noncontrolling interests.

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

Foreign Currency

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Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period.

Gains and losses from these translations are recognized as a cumulative translation adjustment and included in accumulated other comprehensive income (loss).

Gains and losses from these translations are recognized as a cumulative translation adjustment and included in accumulated other comprehensive income.

For transactions that are not denominated in the local functional currency, the Company remeasures monetary assets and liabilities at exchange rates in effect at the end of each reporting period.

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

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Recently Adopted Accounting Pronouncements

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

Improvements to Reportable Segment Disclosures , which requires disclosure of incremental segment information on an annual and interim basis.

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 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.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“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 on its consolidated financial statements.

The Company adopted this standard update effective December 31, 2025 using a prospective approach and included the required disclosures in Note 11.

This standard update did not affect the Company’s operating results.

Recent Accounting Pronouncements Not Yet Adopted

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)

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

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software , which simplifies the capitalization guidance related to internal-use software by removing all references to software development project stages so the guidance is neutral to different software development methods.

This ASU is effective for fiscal years beginning after December 15, 2027, including interim periods within those annual reporting periods, with early adoption permitted and can be applied using a prospective, retrospective, or modified transition approach.

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

In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging and Revenue from Contracts with Customers , which refines the scope of the guidance on derivatives in ASC 815 and clarifies the guidance on share-based payments from a customer in ASC 606.

This ASU is effective for fiscal years beginning after December 15, 2026, including interim periods within those annual reporting periods, with early adoption permitted.

The guidance can be applied prospectively to new contracts entered into on or after the date of adoption or on a modified retrospective basis for contracts existing as of the beginning of the annual reporting period of adoption.

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

Contract Liabilities and Remaining Performance Obligations

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As of December 31, 2025 and 2024, the Company’s contract liabilities were $ 812.3 million and $ 566.4 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.

Revenue of $ 526.6 million and $ 457.6 million was recognized during the years ended December 31, 2025 and 2024, respectively, that was included in contract liabilities as of December 31, 2024 and 2023, respectively.

Remaining Performance Obligations

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

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Investments and Fair Value Measurements

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Total $ 6,703,423 $ 968,685 $ 5,734,738 $ —

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

As of December 31, 2024

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

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

Certificates of deposit 938 — 938 —

Prepaid expenses and other current assets and other assets:

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Total $ 4,959,335 $ 1,843,822 $ 3,115,513 $ —

Certificates of Deposit

The Company’s certificates of deposit are Level 2 instruments.

The fair value of such instruments is estimated based on valuations obtained from third-party pricing services that utilize industry standard valuation models, including both income-based and market-based approaches, for which all significant inputs are observable either directly or indirectly.

These inputs include interest rate curves, foreign exchange rates, and credit ratings.

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, 2025 and 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, 2025

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Total debt securities $ 5,720,869 $ 9,158 $ ( 135 ) $ 5,729,892

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

As of December 31, 2024

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

Included in cash and cash equivalents $ 10,078 $ 1 $ — $ 10,079

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 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 Company sold $ 279.7 million and $ 694.6 million of available-for-sale debt securities during the fiscal years ended December 31, 2025 and 2023.

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, 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

The Company did not sell any

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

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

available-for-sale debt securities during the fiscal year ended December 31, 2024.

As of December 31, 2025 and 2024, available-for-sale debt securities of $ 724.9 million and $ 716.3 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, 2025 or 2024 were in a continuous unrealized loss position for greater than 12 months and it is more likely than not that the Company will hold the securities until maturity or a recovery of the cost basis.

We did not recognize any credit losses related to our available-for sale debt securities during the years end December 31, 2025 and 2024.

All of the Company’s U.S.

3 unchanged sentences

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.

For the years ended December 31, 2025, 2024, and 2023, net unrealized gains and losses from publicly-traded equity securities held at the end of each period were immaterial.

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

1 unchanged sentence

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 as of December 31, 2024 and December 31, 2023.

There were upward adjustments on privately-held equity securities based on observable transactions of $ 30.7 million during the year ended December 31, 2025, and no upward adjustments on privately-held equity securities during the year ended December 31, 2024.

There were no material downward adjustments or impairments for the privately-held equity securities held as of December 31, 2025 or 2024.

Cumulative upward adjustments were $ 30.7 million and cumulative downward adjustments and impairments were not material on privately-held equity securities held by the Company as of December 31, 2025.

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

7 unchanged sentences

During the years ended December 31, 2025, 2024, and 2023, revenue recognized from Strategic Commercial Contracts was $ 15.3 million, $ 52.3 million, and $ 87.3 million, respectively.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Balance Sheet Components

9 unchanged sentences

Total property and equipment, net $ 51,960 $ 39,638

Depreciation and amortization expense related to property and equipment, net was $ 23.7 million, $ 23.7 million, and $ 19.5 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Depreciation and amortization expense related to property and equipment, net was not material for the years ended December 31, 2025, 2024, and 2023.

Accrued Liabilities

2 unchanged sentences

Accrued payroll and related expenses $ 178,659 $ 306,939

Accrued taxes 42,243 47,257

Accrued other liabilities 176,965 120,107

1 unchanged sentence

2014 Credit Facility

In October 2014, the Company entered into an unsecured revolving credit facility, which has been subsequently secured by substantially all of the Company’s assets and amended from time to time (as amended, the “2014 Credit Facility”).

As of December 31, 2024, the Company had no outstanding debt balances and had undrawn revolving commitments of $ 500.0 million available to fund working capital and general corporate expenditures under the 2014 Credit Facility, which has a maturity date of March 31, 2027.

The Company has a secured revolving credit facility, which provides for aggregate revolving commitments of $ 500.0 million and has a maturity date of March 31, 2027 (as amended, the “2014 Credit Facility”).

As of December 31, 2025, the Company had no outstanding debt balances under the 2014 Credit Facility.

The 2014 Credit Facility contains customary representations and warranties, and certain financial and nonfinancial covenants, including but not limited to maintaining minimum liquidity of $ 50.0 million, and certain limitations on liens and indebtedness.

The Company was in compliance with all covenants associated with the 2014 Credit Facility as of December 31, 2025.

The Company has operating leases primarily for corporate office space and equipment .

The Company has operating leases primarily for corporate office space.

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 October 2034, some of which include one or more options to extend.

The Company's leases have remaining terms up to March 2035, some of which include one or more options to extend.

Additionally, some lease contracts include termination options.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Supplemental balance sheet information related to lease liabilities at December 31, 2025 and 2024 was as follows (in thousands):

8 unchanged sentences

Total lease liabilities $ 229,338 $ 239,219

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

The components of lease expense included in the Company's consolidated statements of operations include (in thousands):

Years Ended December 31,

2025 2024 2023

Operating lease expense $ 57,164 $ 57,655 $ 61,972

19 unchanged sentences

Total operating lease liabilities $ 229,338 $ 71,441 $ 157,897

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 weighted-average remaining lease term related to the Company’s operating lease liabilities as of December 31, 2025 and 2024 was six and seven years , respectively.

The weighted-average discount rate related to the Company’s operating lease liabilities as of December 31, 2025 and 2024 was 7 %.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

The following table sets forth the supplemental information related to the Company's operating leases for the years ended December 31, 2025 and 2024 (in thousands):

3 unchanged sentences

$ 37,784 $ 58,320

As of December 31, 2024, the Company has no additional operating leases for office space that have not yet commenced.

Commitments and Contingencies

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 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.

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

Under one of its third-party cloud services agreements, as amended, the Company has committed to spend at least $ 1.95 billion over ten contract years through September 30, 2033, among other things.

As of December 31, 2025, the Company satisfied $ 79.2 million of its $ 170.2 million commitment for the contract year beginning October 1, 2025 and ending September 30, 2026.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Litigation and Legal Proceedings

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

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

employment claims;

securities claims;

investor claims;

corporate claims;

class action claims;

and general contract, tort, or other claims.

The Company may from time to time also be subject to various legal or government claims, disputes, or investigations.

Such matters may include, but not be limited to, claims, disputes, allegations, or investigations related to warranty;

breach of contract;

The Company has been, is currently party to, and may, from time to time, be subject to various legal proceedings, claims, disputes, government investigations, or similar matters arising in the normal course of business.

These may include proceedings, claims, disputes, allegations, or investigations related to, but not limited to, intellectual property;

class actions;

contract or breach of contract;

breach, leak, or misuse of personal data or confidential information;

government procurement;

intellectual property;

government regulation or compliance (including but not limited to anti-corruption requirements, export or other trade controls, data privacy or data protection, cybersecurity requirements, or antitrust/competition law requirements);

government regulation or compliance;

or other matters.

The Company establishes an accrual for loss contingencies when the loss is both probable and reasonably estimable.

The Company evaluates associated developments on a regular basis and establishes an accrual for loss contingencies when the loss is both probable and reasonably estimable.

On September 15, 2022, October 25, 2022, and November 4, 2022, putative securities class action complaints were filed in the United States District Court for the District of Colorado, captioned Cupat v.

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

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

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

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

6 unchanged sentences

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.

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

Karp, et al., Case No.

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

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

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

Because the litigation is in early stages, the Company is unable to estimate the reasonably possible loss or range of loss, if any, that may result from these matters.

As of 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.

On April 4, 2025, the Court dismissed the Cupat matter with prejudice and entered judgment for the defendants on the same day.

On May 2, 2025, plaintiffs filed a Notice of Appeal from the final judgment with the United States Court of Appeals for the Tenth Circuit.

As of December 31, 2025, 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 consolidated financial statements.

Warranties and Indemnification

5 unchanged sentences

The Company has not recorded warranty expense or related accruals as of December 31, 2025 and 2024.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

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

3 unchanged sentences

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

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

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

infringement claims asserted against its customers and does not believe that the Company will be liable for such claims in the foreseeable future.

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 December 31, 2025 and 2024.

17 unchanged sentences

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

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

The timing and the amount of stock repurchases under the Share Repurchase Program 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.

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

During the year ended December 31, 2025, the Company repurchased and subsequently retired 0.6 million shares of its Class A common stock for an aggregate amount, including commissions, of $ 75.0 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.

In January 2026, the Company terminated the Share Repurchase Program.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Stock-Based Compensation

3 unchanged sentences

A total of 165,900,000 shares of the Company’s Class B common stock were reserved for issuance under the Executive Equity Plan.

During August 2020, options to purchase 162,000,000 shares of Class B common

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

stock and restricted stock units covering 3,900,000 shares of the Company’s Class B common stock were granted to certain officers.

During August 2020, options to purchase 162,000,000 shares of Class B common stock and restricted stock units covering 3,900,000 shares of the Company’s Class B common stock were granted to certain officers.

The Executive Equity Plan was terminated prior to the Company’s Direct Listing, and no additional awards will be granted under the Executive Equity Plan.

15 unchanged sentences

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):

The following table summarizes stock option and SAR activity for the year ended December 31, 2025 (in thousands, except per share amounts, years, and aggregate intrinsic value):

Options Outstanding SARs Outstanding

1 unchanged sentence

Weighted-Average

Remaining Contractual Life (years) Aggregate Intrinsic Value

Number of Awards Weighted-Average Exercise Price Per Share

Remaining Contractual Life (years) Aggregate Intrinsic Value (millions) Number of Awards Weighted-Average Exercise Price Per Share

Weighted-Average

Remaining Contractual Life (years) Aggregate Intrinsic Value

Remaining Contractual Life (years) Aggregate Intrinsic Value (millions)

Balance as of December 31, 2024 178,109 $ 9.26 6.9 $ 11,822 6,437 $ 55.75 6.7 $ 128

4 unchanged sentences

Vested and exercisable as of December 31, 2025 72,552 $ 8.44 5.6 $ 12,284 — $ — 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)

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, 2025, 2024, and 2023 was $ 3.0 billion, $ 3.8 billion, and $ 0.5 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.

There were no SARs exercised during the years ended December 31, 2025 and 2023.

The aggregate intrinsic value of SARs exercised during the year ended December 31, 2024 was $ 0.7 billion.

There were no options granted during the years ended December 31, 2025, 2024, and 2023.

The total grant-date fair value of options that vested during the years ended December 31, 2025, 2024, and 2023 was $ 103.6 million, $ 107.7 million, and $ 131.0 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.

The weighted-average grant-date fair value of SARs granted during the year ended December 31, 2025 and 2024 was $ 22.43 and $ 4.08 per share, respectively.

The total grant-date fair value of SARs that vested during the years ended December 31, 2025 and 2024 was $ 18.5 million and $ 138.8 million, respectively.

There were no SARs granted or vested in the year ended December 31, 2023.

As of December 31, 2025, the total unrecognized stock-based compensation expense related to options and SARs outstanding was $ 406.0 million and $ 144.6 million, respectively, which is expected to be recognized over a weighted-average service period of five and eight years , respectively.

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.

The Company grants Time-Vesting SARs that vest over explicit service periods of up to nine years and are exercisable at expiration, during a limited window, if the Company’s stock price reaches a certain threshold.

Time-Vesting SARs have exercise prices of between $ 39 –$ 250 and maximum appreciation values of between $ 60 –$ 300 .

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)

December 31, 2024

Years Ended December 31,

Expected volatility rate 56.7 % – 66.1 %

54.9 % – 59.2 %

Expected term (in years) 3.4 – 9.3

Risk-free interest rate 3.9 % – 4.6 %

3.4 % – 3.9 %

Expected dividend yield — % — %

4 unchanged sentences

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

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

Market-Vesting SARs

During the year ended December 31, 2024, the Company granted SARs that vested upon the satisfaction of a market-based vesting condition and were subject to continued service (“Market-Vesting SARs”).

All Market-Vesting SARs were vested during the year ended December 31, 2024.

RSUs and P-RSUs

5 unchanged sentences

Canceled and forfeited ( 3,263 ) 29.34 ( 20 ) 103.49

Adjustment for performance results achieved (1)

Adjustment for performance achievement (1)

( 74 ) $ 68.14

1 unchanged sentence

(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 Company grants 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.

3 unchanged sentences

The total grant-date fair value of RSUs vested during the years ended December 31, 2025, 2024, and 2023 was $ 503.7 million, $ 436.6 million, and $ 526.1 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.

The total grant-date fair value of P-RSUs vested during the year ended December 31, 2025 and 2024 was $ 82.6 million and $ 75.0 million, respectively.

There were no P-RSUs vested in the year ended December 31, 2023.

As of December 31, 2025, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $ 914.9 million, which is expected to be recognized over a weighted-average service period of three years .

As of December 31, 2025, 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, 2025, 2024, or 2023.

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

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

The Company adopted ASU 2023-09, Income Taxes – Improvements to Income Tax Disclosures , for the annual disclosures for the year ended December 31, 2025 on a prospective basis.

Comparative financial information for prior periods has not been restated and continues to be reported under the accounting standards in effect for those periods.

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

Years Ended December 31,

2 unchanged sentences

Foreign 72,791 62,229 62,454

Income (loss) before provision for income taxes $ 489,173 $ 237,091 $ ( 361,027 )

Income before provision for income taxes $ 1,657,368 $ 489,173 $ 237,091

Provision for income taxes consisted of the following (in thousands):

11 unchanged sentences

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):

Years Ended December 31,

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, subsequent to the adoption of ASU 2023-09 (in thousands, except percentages):

December 31, 2025

Amount Percent

federal tax at statutory rate $ 348,047 21.0 %

State and local income taxes, net of federal income tax effect (1)

Foreign tax effects:

United Kingdom (“U.K.”):

Statutory tax rate difference between the U.K.

( 29,130 ) ( 1.8 )

Expected tax (benefit) at U.S.

Stock-based compensation expense ( 159,108 ) ( 9.6 )

Changes in valuation allowance 184,024 11.1

Other ( 3,279 ) ( 0.2 )

Other foreign jurisdictions 8,637 0.5

Effects of changes in tax laws or rates enacted in the current period — —

Effects of cross-border tax laws — —

Tax credits ( 151,602 ) ( 9.1 )

Changes in valuation allowances 467,493 28.1

Nontaxable or nondeductible items:

Stock-based compensation expense ( 720,691 ) ( 43.4 )

Nondeductible officers' compensation 34,453 2.1

Other 4,442 0.3

Changes in unrecognized tax benefits 37,901 2.3

Total provision for income taxes and effective tax rate $ 22,724 1.4 %

(1) State taxes in Maryland made up the majority of the tax effect in this category.

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, prior to the adoption of ASU 2023-09 (in thousands):

Years Ended December 31,

Expected tax provision at U.S.

federal statutory rate $ 102,726 $ 49,789

11 unchanged sentences

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

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.

For the year ended December 31, 2025, the Company recorded a provision for income taxes of $ 22.7 million compared to $ 21.3 million for the year ended December 31, 2024.

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

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.

The amounts of cash taxes for the year ended December 31, 2025 included the following, subsequent to the adoption of ASU 2023-09 (in thousands):

December 31, 2025

Germany 1,724

All other foreign 4,052

Income taxes, net of amounts refunded

Employment taxes $ 364,675

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.

17 unchanged sentences

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.

and certain foreign net operating tax losses, primarily in the U.K., the Company has continued to maintain a full valuation allowance against potential future benefits for U.S, federal, state, and certain foreign deferred tax assets as of December 31, 2025.

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.

1 unchanged sentence

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.

The future timing and amount of such valuation allowance being released is uncertain based on the

Palantir Technologies Inc.

Notes to Consolidated Financial Statements (continued)

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.

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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.

and foreign based R&E expenditures must be capitalized and amortized over five years and 15 years, respectively.

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 $ 504.2 million as of December 31, 2024 compared to $ 214.8 million as of December 31, 2023 related to the capitalization requirement.

Provisions enacted in 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.

based R&E expenditures had to be capitalized and amortized over five and fifteen years, respectively.

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

As of December 31, 2024, the Company has recorded a deferred tax asset of $ 504.2 million related to the capitalization requirement.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, introducing several significant U.S.

income tax provisions relevant to the Company.

The provisions include immediate expensing of domestic R&E expenditures beginning in 2025.

As a result, the Company expensed the domestic R&E expenditures paid or incurred in the current year and also the unamortized domestic R&E expenditures capitalized in the prior years.

As of December 31, 2025, the Company has recorded a deferred tax asset of $ 85.4 million related to the capitalization requirement.

As of December 31, 2025, the Company had U.S.

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The capital loss carryforwards will expire beginning in 2027 if not utilized.

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.

As of December 31, 2025, the Company had foreign net operating losses, primarily in the U.K., of approximately $ 1.8 billion.

As of December 31, 2024, the Company had foreign net operating losses, primarily in the U.K., of approximately $ 0.9 billion.

These net operating losses can be carried forward indefinitely.

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income taxes and foreign withholding tax on these earnings.

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.

The Organisation for Economic Co-operation and Development (“OECD”) Base Erosion and Profit Shifting (“BEPS”) global minimum tax provision (“Pillar Two”) rules are at varying stages of adoption across jurisdictions where the Company operates.

While the United States has not yet adopted Pillar Two, several countries have enacted Pillar Two and these rules were applicable to the Company starting January 1, 2024 in some jurisdictions, and it did not have a material impact on our financial condition or results of operations for the periods presented.

Furthermore, in response to trade negotiations with the United States, the Group of 7 countries (the “G7”) announced a joint understanding to exempt U.S.-parented multinational corporations from Pillar Two by adopting a “side-by-side” system between Pillar Two and the existing U.S.

global minimum tax provisions, and the OECD released “Tax Challenges Arising from the Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (Pillar Two), Side-by-Side Package:

Inclusive Framework on BEPS” on January 5, 2026, to this effect, which reduces the impact of Pillar Two rules on the Company.

Uncertain Tax Positions

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As of December 31, 2025, 2024, and 2023, the Company recorded gross unrecognized tax benefits of $ 184.2 million, $ 151.2 million, and $ 112.0 million, respectively, that, if recognized, would not benefit the Company’s effective tax rate due to the valuation allowance that currently offsets deferred tax assets.

As of December 31, 2024, no significant increases or decreases are expected to the Company’s uncertain tax positions within the next twelve months.

It is the Company’s policy to recognize interest and penalties related to income tax matters in provision for income taxes on the consolidated statements of operations.

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Notes to Consolidated Financial Statements (continued)

Net Earnings (Loss) Per Share Attributable to Common Stockholders

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

Earnings Per Share Attributable to Common Stockholders

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

As of December 31,

2025 2024 2023

Net income (loss) attributable to common stockholders for diluted net earnings (loss) per share $ 462,190 $ 209,825 $ ( 373,705 )

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

Net income attributable to common stockholders for diluted earnings per share $ 1,625,033 $ 462,190 $ 209,825

Weighted-average shares used in computing earnings per share:

Basic 2,369,612 2,250,163 2,147,446

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Diluted 2,565,197 2,450,818 2,297,927

Net earnings (loss) per share

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

Earnings per share

Earnings per share attributable to common stockholders:

Basic $ 0.69 $ 0.21 $ 0.10

Diluted $ 0.63 $ 0.19 $ 0.09

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):

As of December 31,

2024 2023 2022

Options and SARs issued and outstanding — 162,000 326,913

RSUs and P-RSUs outstanding — 13,245 126,426

Warrants to purchase common stock — — 13,042

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.

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

There were outstanding potentially dilutive common stock equivalents for stock options and RSUs combined of 1.1 million and 175.2 million for the years ended December 31, 2025 and 2023, respectively, which were excluded from the computation of diluted earnings per share attributable to common stockholders due to their antidilutive effect.

There were no outstanding potentially dilutive common stock equivalents for stock options or RSUs for the year ended December 31, 2024.

As of December 31, 2025 and 2024, the Company had 11.3 million and 6.4 million Time-Vesting SARs outstanding, respectively, of which the maximum number of potentially dilutive shares of Class A common stock upon vesting would be the fraction that equals the maximum appreciation divided by the Company’s Class A common stock price at that time.

No Time-Vesting SARs were outstanding as of December 31, 2023.

Segment and Geographic Information

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The CODM does not evaluate the performance of the Company’s assets on a segment basis for internal management reporting and, therefore, such information is not presented.

Contribution is used, in part, to evaluate the performance of, and allocate resources to, each of the segments.

Contribution is used, in part, to evaluate the performance of, and allocate resources to, each of the segments, primarily by monitoring actual results versus historical periods.

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

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Notes to Consolidated Financial Statements (continued)

Financial information for each reportable segment was as follows (in thousands):

Financial information for each reportable segment was as follows (in thousands, except percentages):

Years Ended December 31,

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Total contribution $ 2,942,697 66 % $ 1,719,948 60 % $ 1,245,555 56 %

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

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

Years Ended December 31,

2025 2024 2023

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

Income from operations $ 1,414,015 $ 310,403 $ 119,966

Research and development expenses (1)

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Total property and equipment, net $ 51,960 100 % $ 39,638 100 %

Intangible Assets

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

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

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

Customer relationships 2.8 $ 10,400 $ ( 4,507 ) $ 5,893 $ 10,400 $ ( 2,427 ) $ 7,973

Reacquired rights 4.8 17,618 ( 5,453 ) 12,165 17,618 ( 2,936 ) 14,682

Backlog 0.0 6,700 ( 6,700 ) — 6,700 ( 3,908 ) 2,792

Other 0.0 4,225 ( 4,225 ) — 4,225 ( 3,770 ) 455

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

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

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.

Alexander Karp, the Company’s Chief Executive Officer, flies on non-commercial aircraft beneficially owned by him (the “Executive Aircraft”) for business and personal travel.

During the years ended December 31, 2025 and 2024, the Company incurred expenses related to the use of the Executive Aircraft of $ 17.2 million and $ 7.7 million, respectively.

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