A month has gone by since the last earnings report for Palantir Technologies Inc. (PLTR Quick QuotePLTR - Free Report) . Shares have lost about 9.3% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Palantir Technologies due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.

PLTR Beats Q2 Earnings Estimates

Palantir Technologies not only delivered better-than-expected earnings and revenue but also achieved a milestone: its first-ever billion-dollar quarter.

Fueled by its fast-expanding Artificial Intelligence Platform (AIP) and surging demand from both government and commercial sectors — especially in the United States — PLTR’s growth trajectory looks more promising than ever.

PLTR Delivers Blockbuster Billion-Dollar Revenue Quarter

Palantir posted second-quarter 2025 revenues of $1 billion, a 48% year-over-year surge that easily beat the Zacks Consensus Estimate of $938.3 million. This was not only a clear beat but also the first time the software firm crossed the $1 billion quarterly revenue threshold, a major psychological and financial milestone.

Earnings per share came in at 16 cents, beating expectations by 2 cents and jumping a whopping 78% from the year-ago quarter. Adjusted EBITDA hit $470.9 million, up 69% from the prior year, with a striking adjusted EBITDA margin of 47%, up 800 basis points year over year.

Geographically, the U.S. market remains the primary driver of PLTR’s growth narrative. U.S. revenues grew 68% year over year to reach $733 million. Within that, U.S. commercial revenues surged an eye-popping 93% to $306 million, while U.S. government business rose 53% to $426 million.

Palantir's CEO Alex Karp described the quarter as "phenomenal," emphasizing that the company achieved a Rule of 40 score of 94%, a rare and elite threshold in software. The Rule of 40 combines revenue growth and profit margin; if the sum exceeds 40%, the Software business is healthy. Notably, PLTR closed 157 deals worth at least $1 million, with 42 deals exceeding $10 million, showcasing robust customer traction.

AIP Driving PLTR’s Commercial Growth Engine

The core catalyst behind Palantir’s explosive growth is its Artificial Intelligence Platform (AIP), which is fast becoming the company's primary growth engine. In fact, in just the first quarter, U.S. commercial revenue jumped 71% YoY and crossed the $1 billion annual run rate milestone. That momentum carried into the second quarter, pushing U.S. commercial growth to 93% YoY.

AIP enables clients to integrate autonomous AI agents directly into operational workflows, allowing organizations to make decisions faster and improve productivity by magnitudes, not just percentages. While many competitors focus on AI model development, PLTR is excelling in deployment, a crucial differentiator. It offers a turnkey AI solution that’s enterprise-ready from day one.

Palantir’s AIP bootcamps — short, intensive implementation workshops — have played a key role in accelerating adoption. These sessions help clients quickly move from onboarding to deploying AI in production, drastically reducing time-to-value. The feedback has been overwhelmingly positive, with clients appreciating AIP’s user-friendly interface, scalability and immediate business impact.

Thanks to AIP, the total U.S. commercial contract value skyrocketed 222% YoY, while the remaining deal value climbed 145% to $2.79 billion. Customer count also grew 43% year over year, underscoring PLTR’s ability to scale rapidly while maintaining high satisfaction.

Strong Guidance and PLTR’s Path Ahead

Following the record-setting quarter, Palantir raised its full-year 2025 revenue guidance to a range of $4.14 to $4.15 billion, up from a prior estimate of $3.90 billion. For the third quarter of 2025, the company expects revenues of about $1.085 billion, once again above the current consensus expectations of $989.44 million. If achieved, this would mark the highest sequential revenue growth in Palantir’s history.

Additionally, PLTR forecasts adjusted income from operations between $1.91 billion and $1.92 billion for the year. Adjusted free cash flow is projected between $1.8 billion and $2 billion, a significant war chest that provides flexibility for expansion and R&D.

On the balance sheet, Palantir remains financially strong, ending the quarter with $929.5 million in cash and equivalents, despite being down from $2.1 billion at the end of 2024 due to ongoing investments. Operating cash flow for the quarter was a healthy $539.3 million, reflecting the firm’s profitability and operational efficiency.

PLTR’s performance stands out in an increasingly crowded AI space, where many companies are still experimenting with pilot deployments. Palantir’s strategy of making AI immediately useful — through production-ready agents and scalable platforms — has created a distinct moat around its commercial and government businesses.

As AI continues to transform the software landscape, Palantir is one of the few players capitalizing not just on the hype but on the tangible utility of AI, delivering operationalized solutions that clients are eager to adopt.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates review.

The consensus estimate has shifted 24.2% due to these changes.

VGM Scores

At this time, Palantir Technologies has a strong Growth Score of A, a score with the same score on the momentum front. However, the stock has a score of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Palantir Technologies has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Palantir Technologies belongs to the Zacks Internet - Software industry. Another stock from the same industry, Automatic Data Processing (ADP Quick QuoteADP - Free Report) , has gained 0.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.

ADP reported revenues of $5.13 billion in the last reported quarter, representing a year-over-year change of +7.5%. EPS of $2.26 for the same period compares with $2.09 a year ago.

For the current quarter, ADP is expected to post earnings of $2.44 per share, indicating a change of +4.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.

ADP has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.