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How Will Palantir's (PLTR) Top Line Shape Up in Q4 Earnings?

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Palantir Technologies Inc. (PLTR - Free Report) will report fourth-quarter 2020 results on Feb 16.

The company’s top line is expected to have performed well in the quarter, driven by increased scale and efficiency of its three-phase business model that engages acquire phase, expand phase and scale phase customers. Both government and commercial segments are anticipated to do well, driven by these strengths.

Palantir’s acquire phase customers generate less than $100,000 a year. Expand phase customers generate greater than $100,000 a year with negative contribution margins and require significant investments from the company for scaling themselves up and growing revenues. Customers in scale phase generate greater than $100,000 a year as well as positive contribution margins.

In the to-be-reported quarter, we expect Palantir to have seen revenue growth through the addition of new acquire phase customers. Expand phase revenues are expected to have benefited from increased adoption of software, while increased contributions from existing customers are likely to have helped the scale phase.

Palantir Technologies Inc. Price and EPS Surprise

Notably, the Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $300.4 million, indicating sequential growth of 3.8%.

Palantir currently carries a Zacks Rank 3 (Hold).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Recent Performance of Some Business Services Companies

Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate as well as the year-ago figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and improved 6% year-over-year.

IHS Markit’s (INFO - Free Report) fourth-quarter fiscal 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Estimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter on a reported basis.

Automatic Data Processing’s (ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year.

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