Palantir reported 63% year-over-year revenue growth in Q3-FY2025, marking its ninth consecutive quarter of accelerating top-line expansion. This surge was driven by a 121% increase in U.S. commercial revenue and a 78% jump in international deals. Non-GAAP operating margins widened to a record 27%, up from 19% a year earlier, reflecting improved operating leverage as the company scales its AI-driven Foundry and Gotham platforms. Total contract value (TCV) climbed 342% year-over-year, underscoring strong demand and robust deal velocity across both government and enterprise clients.

Palantir’s return on equity stood at 27.6% for the trailing twelve months, trailing the average 35% ROE among its AI/analytics peers. Management attributes the gap to heavy upfront infrastructure investments and modular subscription pricing, which defer margin gains but underpin longer contract durations. With a weighted average contract length of 4.2 years and a deferred revenue balance exceeding $2.1 billion, investors can expect ROE to expand as higher-margin subscription revenues mature over the next 18–24 months.

The company’s Bootcamp sales model has created a high-velocity deal-closing flywheel: participating clients increased by 145% in Q3, fueling 121% year-over-year growth in U.S. commercial revenue. Palantir’s Rule of 40 score reached an industry-leading 114% in Q3, combining robust revenue growth with strong free cash flow margins of 22%. The AIPlatform’s operational leverage has driven rapid adoption, with 57 customers migrating at least one mission-critical application from prototype to production during the quarter.

In early December, Palantir entered a $100 million strategic partnership with Surf Air Mobility to power its SurfOS private aviation platform, allocating $26 million toward engineering, go-to-market efforts and enterprise features. The deal sets the stage for SurfOS’s planned commercial launch in mid-2026 and exemplifies Palantir’s strategy of embedding its AIPlatform into adjacent verticals. Additionally, the company’s pipeline includes over $4 billion in potential government awards under review, highlighting a balanced growth runway across public and private sectors.