In its latest quarter, Palantir Technologies reported an increase in commercial customer count to 379, up from 315 a year earlier, reflecting a 20% year-over-year gain. Average revenue per commercial customer rose to $1.8 million, compared with $1.5 million in the prior period, driven by stronger adoption of Palantir’s Foundry platform among Fortune 500 companies. The company highlighted new contracts with two major European energy firms and a U.S. pharmaceutical distributor, contributing an incremental $45 million in annualized recurring revenue (ARR).

Palantir narrowed its net loss to $102 million, or $0.13 per share, on a non-GAAP basis, versus a $125 million loss in the same quarter last year. Gross margin expanded to 81%, up from 78% year-over-year, reflecting disciplined cost controls and higher software subscription mix. Free cash flow turned positive at $22 million, compared to an outflow of $8 million in the prior year period, driven by stronger subscription billing and tighter working capital management.

The company allocated 24% of revenue to research and development, totaling $195 million, as it continues to invest in AI enhancements for its Gotham and Foundry products. Palantir reported that 62% of its new deals in the quarter included at least one AI-driven module, a significant increase from 48% a year earlier. Management emphasized ongoing trials of its new AI assistant feature with three global banks and two government agencies, positioning Palantir to capture further upside as enterprises accelerate AI deployments.

For the full year, Palantir reiterated its guidance for revenue between $2.5 billion and $2.6 billion, implying growth of approximately 20%. Operating margin targets were maintained at breakeven on a non-GAAP basis, as continued scale offsets higher AI infrastructure costs. Analysts note that with a current enterprise value to ARR multiple near 15x, Palantir’s valuation reflects lofty expectations for sustained commercial expansion and AI monetization. Investors will closely watch next quarter’s billings trend and government backlog conversion as key catalysts.