Palantir lower revenue forecast after quarterly loss

Palantir Technologies Inc lowered its annual revenue forecast to below market estimates after the data analytics software company reported a surprise quarterly loss on Monday, sending its shares down 15 per cent.

The company had to temper its revenue forecast due to the uncertainty surrounding government contracts, Chief Executive Alexander Karp said. Chief Financial Officer David Glazer said that the contracts are so unpredictable because of the large size of government awards and the long-drawn procurement procedure. The third quarter revenue was less than Street estimates, according to the company.

Palantir was founded in 2003 by billionaire entrepreneur Peter Thiel to help with U.S. counter-terrorism operations, but has since diversified to commercial business and now derives almost half of its sales from the private sector.

Glazer said that the company's international business, which makes up about 40 per cent of its sales, was hit by foreign exchange headwinds.

RBC Capital Markets Rishi Jaluria said it could be hard for Palantir to sell big deals with long sales cycles to corporations as businesses are increasingly scrutinizing their IT budgets due to macro uncertainty.

Palantir expects total revenue for the full year between $1.9 billion and $1.902 billion, or a growth of 23 per cent, compared to the 30 per cent or more growth forecast earlier in the year. Analysts had expected revenue of $1.96 billion.

The company lost 1 cent per share in the second quarter, due to Palantir's investments in SPACs, according to Glazer. According to Refinitiv data, analysts on average had expected a profit of 3 cents per share.

Revenue went up 26 per cent to $473 million in the quarter.