The Stock of Palantir Declined After Earnings After the Company Announced a $1 Billion Buyback Program

Palantir Technologies Inc. disclosed its latest quarterly results on Monday, aligning with expectations, and concurrently unveiled a new share-buyback authorization amounting to $1 billion.

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The software company reported its third consecutive quarter of GAAP profitability, with a second-quarter net income of $28 million, equivalent to 1 cent per share. This contrasts with a net loss of $179.3 million, or 9 cents per share, recorded in the corresponding period of the previous year. Analysts monitored by FactSet had forecasted GAAP earnings per share of 1 cent.

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Palantir (PLTR, -9.20%) also reported adjusted earnings per share of 5 cents, aligning with the consensus projected.

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Revenue exhibited growth, increasing to $533 million from $473 million, in line with the FactSet consensus. Within this, commercial revenue amounted to $232 million, marking a 10% increase from the previous year, while government revenue reached $302 million, reflecting a 15% surge.

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In premarket trading on Monday, Palantir shares experienced a decline of over 2%.

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Chief Revenue Officer Ryan Taylor stated, "We continue to witness an unprecedented level of demand." This demand encompasses both initial conversations with new clients and the expansion of Palantir software usage among existing clients. Taylor highlighted the growing momentum for the company's artificial intelligence offerings.

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Taylor also emphasized the strength of Palantir's engagements with the U.S. government, describing the company's government work as being at its zenith.

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Additionally, Palantir revealed the approval of a stock-buyback program of up to $1 billion by its board of directors. This strategic move coincides with the company's achievement of $285 million in adjusted free cash flow for the first half of the year, along with a balance sheet concluding the second quarter with $3.1 billion in cash and equivalents.

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Chief Financial Officer David Glazer underscored the significance of this development, stating, "Our financial performance, coupled with the billion-dollar buyback authorization, reflects our resolute belief in the company's future. This belief centers around the vast potential of AI."

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In a shareholder letter, Chief Executive Alex Karp conveyed, "The scale of the opportunity ahead has substantially expanded in recent months. We are fully committed to capturing this potential." Karp noted that the company is in discussions with over 300 additional enterprises concerning the adoption of Palantir's AI platform, especially focused on the integration of advanced language models into their internal systems and proprietary data.

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For the upcoming third quarter, Palantir anticipates revenue ranging from $553 million to $557 million, accompanied by GAAP profitability. FactSet analysts had projected revenue of $553 million.

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Moreover, Palantir foresees reporting GAAP net income for its fourth quarter. The company's full-year revenue projection exceeds $2.212 billion, while analysts' predictions had hovered around $2.210 billion.

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Palantir's shares have appreciated by 180% year-to-date.

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