Palantir Technologies Financial Model
Software Company Financials Example (Free Excel Download)
Palantir Technologies builds foundational software platforms that enable organisations to integrate, manage, and secure their data.
professionals from Deloitte
Used by professionals from
About this model
This model forecasts Palantir Technologies' revenue growth, profitability, and cash flow generation to determine its equity valuation, focusing specifically on the rapid scaling of its Artificial Intelligence Platform (AIP) within the United States commercial sector.
Palantir Technologies builds foundational software platforms that enable organisations to integrate, manage, and secure their data. The company provides software for both the intelligence community and commercial enterprises, allowing them to deploy artificial intelligence and machine learning models securely.
The business operates through two primary segments: the Government segment (approximately 54% of 2025 revenue) and the Commercial segment (approximately 46% of 2025 revenue). Geographically, the United States is the dominant market, contributing roughly 74% of total revenue, while international markets make up the remainder. Palantir operates a highly scalable, asset-light software-as-a-service business model. Its competitive position is exceptionally strong in the defence and enterprise AI sectors, often operating as a category of one with its AIP and Foundry platforms. In February 2026, the company relocated its global headquarters from Denver, Colorado, to Aventura, Florida, reflecting its continued expansion and shifting corporate footprint.
The downloadable Palantir Technologies financial model includes SEC-sourced historical financials, forecast assumptions, core operating schedules, and valuation outputs in an Excel workbook built for review and scenario analysis.
A turnkey financial model
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
Historicals & AssumptionsPalantir Technologies financial modelCompany, Historicals & Assumptions used
Source: SEC EDGAR · values in USD
| Line item | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue | $1.54B | $1.91B | $2.23B | $2.87B | $4.48B |
| Gross profit | $1.20B | $1.50B | $1.79B | $2.30B | $3.69B |
| Operating income | -$411.0M | -$161.2M | $120.0M | $310.4M | $1.41B |
| Net income | -$520.4M | -$373.7M | $209.8M | $462.2M | $1.63B |
Forecast assumptions
Defaults used in the downloadable model. Forecast horizon: FY2026–FY2030.
See 8 moreSee less
How to build a detailed financial model for Palantir Technologies
A complete walkthrough of every driver, margin, working-capital input, and capital-allocation assumption used in the downloadable model.
Revenue Deep Dive
Government Segment
- Segment name: Government
- Revenue driver formula: Government Customers x Average Revenue Per Government Customer
- Historical growth rate: 30% to 55% CAGR (accelerated to 53% year-over-year in 2025, driven by 55% growth in US Government)
- Key growth levers and headwinds: Growth is driven by increasing defence budgets, the adoption of AI in military applications, and expanding contracts with allied nations. Headwinds include the unpredictable timing of government contract awards and geopolitical shifts.
- Pricing dynamics: Contractual and highly regulated, often involving long-term enterprise agreements.
- Revenue recognition notes: Recognised over the contract term as software services are provided.
- Seasonality: The fourth quarter is typically the strongest due to the United States federal government purchasing cycle ending in September, which translates to Q4 deployments.
Commercial Segment
- Segment name: Commercial
- Revenue driver formula: Commercial Customers x Average Revenue Per Commercial Customer
- Historical growth rate: 35% to 60% CAGR (accelerated to 60% year-over-year in 2025, with US Commercial growing 109%)
- Key growth levers and headwinds: The primary growth lever is the AIP bootcamp go-to-market strategy, which rapidly converts enterprise prospects into paying customers. Headwinds include macroeconomic pressure on enterprise IT budgets and slower adoption in international markets (International Commercial grew only 2% in 2025).
- Pricing dynamics: Contractual, value-based pricing that scales with usage and enterprise deployment size.
- Revenue recognition notes: Subscription revenue recognised rateably over the contract term.
- Seasonality: Less seasonal than the government segment, though Q4 often sees a spike in enterprise software budget flushes.
Cost Structure
Variable Costs / COGS
- Line-by-line breakdown: Cloud hosting costs, third-party infrastructure expenses, field service engineer compensation, and customer support personnel.
- Gross margin range: 80% to 86% (Adjusted gross margin reached 84% for the full year 2025 and 86% in Q4 2025).
- Key input costs: Cloud computing resources (AWS, Azure, Google Cloud) and specialised technical labour.
- How COGS scales: Highly scalable with massive operating leverage, as the core software platforms require minimal incremental cost to deploy to new customers.
Operating Expenses
- R&D: Typically 15% to 20% of revenue. It covers software engineering, AI model integration, and platform development. Palantir does not capitalise significant software development costs.
- SG&A: Sales and marketing expenses are scaling to support the AIP bootcamp strategy, while general and administrative costs cover corporate functions. SG&A is heavily headcount-driven.
- Depreciation & Amortisation: Minimal (typically 1% to 2% of revenue) due to the asset-light nature of the business.
- Stock-Based Compensation: Historically very high but normalising as a percentage of revenue. It remains a critical component of employee remuneration and must be tracked carefully.
- Restructuring / one-time charges: Infrequent, though the company occasionally incurs costs related to office relocations (such as the 2026 move to Florida).
Margin Profile
- Gross margin: 80% to 86% (expanding).
- Operating margin: GAAP operating margin reached 32% in 2025, while adjusted operating margin hit 50%.
- Net margin: GAAP net margin was 36% in 2025.
- Margin trend: Rapidly expanding due to immense operating leverage and commodity cognition scaling.
Balance Sheet Structure
- Total assets: Approximately $8.5 billion to $9.5 billion.
- Key asset categories: Cash and cash equivalents, short-term United States Treasury securities, accounts receivable, and operating lease right-of-use assets.
- Goodwill & intangibles: Minimal, as Palantir relies almost entirely on organic growth rather than acquisitions.
- Working capital profile:
- Days Sales Outstanding (DSO): 60 to 80 days.
- Days Inventory Outstanding (DIO): 0 days (software company).
- Days Payable Outstanding (DPO): 20 to 30 days.
- Net working capital: Palantir operates with negative net working capital due to large deferred revenue balances, allowing it to fund growth through customer prepayments.
- PP&E: Very small (less than 5% of assets), consisting mostly of leasehold improvements and computer equipment.
- Right-of-use assets: Material due to global office leases, including the new Aventura headquarters.
Capital Expenditure & Investment
- Capex as % of revenue: 0.5% to 1.5%.
- Maintenance vs. growth split: Almost entirely maintenance capex for IT equipment and office facilities.
- Major capex programmes: None material.
- Capitalised software: Palantir generally expenses software development costs as incurred.
- M&A pattern: Pure organic grower. The company rarely acquires other businesses.
Debt & Capital Structure
- Total debt: Zero. The company is entirely debt-free.
- Net debt: Deeply negative (net cash position of $7.2 billion at the end of 2025).
- Credit rating: Unrated, but operates with a fortress balance sheet.
- Key debt instruments: The company maintains an undrawn revolving credit facility for liquidity purposes.
- Share repurchase programme: No active share repurchases were mentioned in the 2025 earnings call.
- Dividend policy: The company does not pay a dividend and reinvests all cash into operations and treasury yields.
Cash Flow Characteristics
- Operating cash flow conversion: Exceptionally high. Operating cash flow was $2.134 billion in 2025, representing a 48% margin.
- Free cash flow margin: Adjusted free cash flow margin was 51% in 2025 ($2.27 billion).
- Major non-cash items: Stock-based compensation is the largest add-back bridging net income to operating cash flow.
- Working capital cash flow impact: Positive source of cash due to the growth in deferred revenue and customer deposits.
- Capex intensity: Extremely low, allowing almost all operating cash flow to convert to free cash flow.
- Cash tax rate: Lower than the statutory rate due to the tax deductibility of stock-based compensation and historical net operating losses.
Sheet Structure
- Assumptions: Contains all hardcoded drivers, growth rates, margin targets, and macroeconomic inputs.
- Revenue & Bookings: Forecasts customer counts, ARPU, and revenue split into four distinct sub-segments (US Commercial, International Commercial, US Government, International Government).
- Income Statement: Standard P&L from revenue down to GAAP net income, plus a reconciliation to Adjusted Operating Income and Adjusted Net Income.
- Stock-Based Compensation: A dedicated schedule tracking SBC expense, employer payroll taxes on SBC, and the resulting dilution to the share count.
- Balance Sheet: Assets, liabilities, and shareholders' equity, featuring a detailed working capital schedule and deferred revenue roll-forward.
- Cash Flow Statement: Indirect method starting from GAAP net income, adjusting for SBC, and calculating Adjusted Free Cash Flow.
- DCF Valuation: Unlevered free cash flow build, WACC calculation, terminal value, and implied share price.
Key Financial Relationships
- Total Revenue = US Commercial Revenue + International Commercial Revenue + US Government Revenue + International Government Revenue
- US Commercial Revenue = US Commercial Customers * Average Revenue Per US Commercial Customer
- Adjusted Gross Profit = Total Revenue - Adjusted Cost of Revenue (excluding SBC)
- Adjusted Operating Income = GAAP Income from Operations + Stock-Based Compensation + Employer Payroll Taxes Related to Stock-Based Compensation
- Rule of 40 Score = Year-over-Year Revenue Growth Percentage + Adjusted Operating Margin Percentage
- Adjusted Free Cash Flow = Cash from Operations - Purchases of Property and Equipment + Employer Payroll Taxes Related to Stock-Based Compensation
- Total Remaining Deal Value = Prior Period Remaining Deal Value + Total Contract Value Bookings - Recognised Revenue
- Diluted Shares Outstanding = Basic Shares Outstanding + Dilutive Impact of Options and Restricted Stock Units
- Deferred Revenue Ending Balance = Deferred Revenue Beginning Balance + Billings - Recognised Revenue
- Interest Income = Average Cash and Equivalents Balance * Yield on Short-Term Treasury Securities
Cross-Sheet Dependencies
The Assumptions sheet dictates the growth rates in the Revenue & Bookings sheet. The output from Revenue & Bookings feeds the top line of the Income Statement and drives the billings calculation on the Balance Sheet (Deferred Revenue). The Stock-Based Compensation sheet feeds directly into the operating expenses on the Income Statement and serves as a major non-cash add-back on the Cash Flow Statement. The Cash Flow Statement determines the ending cash balance, which flows back to the Balance Sheet to prevent circularity, while interest income is calculated on the prior period's cash balance to avoid circular references. The DCF Valuation pulls operating profit and taxes from the Income Statement and capex from the Cash Flow Statement.
Sign Convention
Revenues and asset balances are entered as positive numbers. Expenses, capital expenditures, and liability reductions are entered as negative numbers in calculation formulas. On the Cash Flow Statement, cash inflows are positive and cash outflows are negative. Margins and growth rates are expressed as positive percentages.
Things Most Likely to Go Wrong
- Failing to split the commercial segment geographically will ruin the forecast. US Commercial is growing at 109% while International Commercial is growing at 2%. They must be modelled separately.
- Ignoring the dilution from stock-based compensation will artificially inflate the per-share valuation. The model must capture the rising share count.
- Confusing GAAP operating income with adjusted operating income. Palantir guides based on adjusted metrics, which exclude SBC and related payroll taxes.
- Overestimating capital expenditures. Palantir is a software company with negligible capex; modelling standard corporate capex ratios will destroy free cash flow accuracy.
- Mismodelling interest income. With $7.2 billion in cash and no debt, interest income is a material contributor to the bottom line and must be forecast accurately based on treasury yields.
- Applying a standard working capital percentage to revenue. Palantir's deferred revenue dynamics mean working capital is a source of cash, not a use of cash.
- Underestimating the Rule of 40. Palantir operates at a 127% Rule of 40 score; hardcoding a reversion to a standard 40% will severely undervalue the near-term cash generation.
- Failing to account for the massive operating leverage. As revenue scales, gross margins and operating margins are expanding rapidly, not staying flat.
Validation Checks
- The Rule of 40 score (Revenue Growth + Adjusted Operating Margin) should exceed 100% in the near term, flagging if it drops below 80% before 2028.
- Adjusted Free Cash Flow margin should remain in the 45% to 55% range based on 2025 actuals.
- Total cash and short-term investments must equal the prior period balance plus net change in cash from the Cash Flow Statement.
- The Balance Sheet must balance perfectly in every forecast period.
- US Commercial revenue growth should align with management's 2026 guidance of at least 115%.
- Total revenue for 2026 should fall within the guided range of $7.182 billion to $7.198 billion.
- Debt balances must remain at zero unless a specific assumption is toggled to introduce leverage.
- Gross margin should not exceed 90%, as cloud hosting costs create a natural ceiling for software gross margins.
Key Assumptions (Default Values)
| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| US Commercial Revenue Growth (2026) | 115.0 | % | Management guidance for FY2026 |
| US Government Revenue Growth (2026) | 45.0 | % | Slight deceleration from 55% in 2025 due to the law of large numbers |
| International Commercial Revenue Growth | 5.0 | % | Conservative estimate based on 2% growth in 2025 |
| International Government Revenue Growth | 20.0 | % | Normalisation from 47% growth in 2025 |
| Adjusted Gross Margin | 85.0 | % | Slight expansion from 84% in 2025 due to scale |
| Adjusted Operating Margin | 57.0 | % | Matches Q4 2025 exit rate |
| Stock-Based Compensation as % of Revenue | 12.0 | % | Downward trend from historical highs as revenue scales |
| Capex as % of Revenue | 1.0 | % | Historical average for the asset-light business model |
| Effective Tax Rate | 18.0 | % | Estimated long-term cash tax rate |
| Interest Yield on Cash | 4.5 | % | Current yield on short-term US Treasury securities |
| Days Sales Outstanding (DSO) | 70 | Days | Based on historical receivables turnover |
| WACC | 9.5 | % | Standard discount rate for high-growth, debt-free software |
| Terminal Growth Rate | 4.0 | % | Long-term GDP plus premium for sticky enterprise software |
Data Sources & Benchmarks
- Filings: SEC EDGAR database for Palantir's 2025 10-K and Q4 2025 earnings press release.
- Investor Relations: Palantir's official IR website for earnings presentations and management letters.
- Key Peers: Snowflake (SNOW), Datadog (DDOG), CrowdStrike (CRWD), and ServiceNow (NOW) for software margin and valuation benchmarking.
- Consensus Estimates: FactSet or Bloomberg for checking out-year revenue and EPS estimates against model outputs.
Sources
Do more with the Palantir Technologies model
Frequently asked
What does Palantir Technologies do?+
Palantir Technologies builds foundational software platforms that enable organizations to integrate, manage, and secure their data. The company provides software for both the intelligence community and commercial enterprises, allowing them to deploy artificial intelligence and machine learning models securely.
What are Palantir Technologies' main revenue drivers?+
Palantir's revenue is primarily driven by its Government segment, which accounts for approximately 54% of 2025 revenue, and its Commercial segment, contributing about 46%. The United States is the dominant market, generating roughly 74% of total revenue, with international markets making up the remainder.
What is the assumed revenue growth rate for Palantir Technologies in financial models?+
Financial models for Palantir Technologies typically assume a revenue growth rate of 20%. This assumption focuses specifically on the rapid scaling of its Artificial Intelligence Platform (AIP) within the United States commercial sector.
What is Palantir Technologies' capital expenditure as a percentage of revenue?+
Palantir Technologies operates with very low capital expenditure, typically ranging from 0.5% to 1.5% of revenue. This capex is almost entirely for maintenance, covering IT equipment and office facilities, reflecting its asset-light software-as-a-service business model.
What is the purpose of the Palantir Technologies financial model?+
The Palantir Technologies financial model forecasts the company's revenue growth, profitability, and cash flow generation. Its primary purpose is to determine the equity valuation of PLTR, focusing specifically on the rapid scaling of its Artificial Intelligence Platform (AIP).
Can I download an Excel financial model for Palantir Technologies?+
Yes, an Excel financial model for Palantir Technologies is available for download. This model forecasts the company's financials from FY2026 through FY2030, providing detailed assumptions for revenue growth, margins, and cash flow.
Have more financial modelling questions? Contact us
Created by ex-finance professionals
Hey, I’m Alex and I created Finamodel.
Over my years in the finance industry I kept building the same models over and over again. Same structure, same assumptions, different logo. So I started building frameworks to turn them into clean, reusable templates.
Every model here is one I’d actually use for a client, and I personally vet each one before it goes up.
I’m not an expert in every industry, but I’ve built enough models to know what belongs in one. And when something is completely foreign to me, I reach out to my network for experts to work on our models with us.
Having a template library on hand cuts a first build from hours to minutes.
Need help finding your model? You’ll find me in the Finamodel app!
Other Software Company Financial Models
Browse another company in the same sector.
Adobe
Adobe is a global software company that provides content creation, document management, and digital marketing solutions through a cloud-based subscription model for creators, businesses, and enterprises.
Autodesk
Autodesk is a global leader in 3D design, engineering, and entertainment software, providing essential tools for architects, engineers, manufacturers, and digital artists.
Broadridge Financial Solutions
Broadridge Financial Solutions is a global financial technology leader providing investor communications and technology-driven solutions to banks, broker-dealers, asset managers, and corporate issuers.
Cadence Design Systems
Cadence Design Systems is a leading provider of electronic design automation (EDA) software, semiconductor intellectual property (IP), and system design and analysis products.
Salesforce
Salesforce is a global cloud computing company that provides enterprise software focused on customer relationship management (CRM), customer service, marketing automation, analytics, and application development.
Datadog
Datadog operates a SaaS-based observability and security platform for cloud applications, integrating infrastructure monitoring, application performance monitoring (APM), log management, and cloud security.
Fair Isaac
Fair Isaac Corporation (FICO) is a leading applied analytics and data decisioning company, best known for the ubiquitous FICO Score used in consumer credit risk assessment.
Fidelity National Information Services
Fidelity National Information Services (FIS) is a global financial technology company that provides core banking, payment processing, and capital markets software to financial institutions and corporations.
Explore more Tech & Software financial model templates.
