It has been about a month since the last earnings report for Palantir Technologies Inc. (PLTR Quick QuotePLTR - Free Report) . Shares have lost about 6.8% 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? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Palantir Technologies Inc. before we dive into how investors and analysts have reacted as of late.

PLTR Beats Q4 Earnings Estimates

Palantir Technologies delivered one of the strongest quarters in its public-market history, closing the fourth quarter of 2025 with revenue of $1.41 billion, beating the Zacks Consensus Estimate by 4.5%, representing 70% year-over-year growth and 19% sequential expansion. Full-year revenue reached $4.48 billion, up 56% from the prior year, underscoring that this acceleration was sustained rather than episodic.

The U.S. business was the standout. Fourth-quarter U.S. revenues climbed to $1.08 billion, a 93% year-over-year increase, while full-year U.S. revenues reached $3.32 billion, growing 75% annually. The United States now accounts for roughly three-quarters of total revenue, highlighting a decisive geographic concentration of demand.

PLTR’s Profitability Moves in Lockstep With Growth

What separated this quarter from typical high-growth software results was the level of profitability achieved alongside rapid expansion. Adjusted operating income came in at $798 million, translating to an operating margin of approximately 57%. For the full year, adjusted operating income reached $2.25 billion, maintaining a 50% margin.

Free cash flow generation was equally striking. Palantir produced $2.3 billion in adjusted free cash flow for 2025, representing an 82% year-over-year increase.

PLTR’s AI Adoption Translates Directly Into Revenues

Customer behavior further validated Palantir’s strategy. The company ended the quarter with 954 customers, a 34% year-over-year increase, while net dollar retention rose to 138%, signaling significant expansion within existing accounts.

Rather than a surge in small, experimental contracts, growth was driven by larger, more strategic deployments. Total contract value reached a quarterly record of $4.26 billion, supported by 61 deals exceeding $10 million. This contrasts with Snowflake’s more usage-based consumption model and differentiates Palantir from C3.ai’s narrower application-led deployments.

U.S. Commercial and Government Momentum Accelerates

The U.S. commercial segment continued its remarkable climb, posting 137% year-over-year growth and 28% sequential growth in the quarter. This followed already elevated growth rates in prior quarters, reinforcing that demand is compounding rather than cooling.

Government momentum remained robust, anchored by large defense and federal contracts, including a single U.S. Navy award valued at $448 million. These long-duration agreements add revenue visibility and stability that most pure-play commercial software providers, including Snowflake and C3.ai, lack.

Guidance Signals Confidence, Not Caution

Management’s outlook for 2026 reinforced the strength of the current trajectory. First-quarter revenue is guided to $1.53 billion at the midpoint, implying continued sequential growth. For the full year, Palantir expects revenues of roughly $7.19 billion at the midpoint, indicating 61% year-over-year growth.

Profitability is expected to remain exceptional. Adjusted operating income guidance of around $4.13 billion implies further margin expansion, while adjusted free cash flow is projected between $3.9 billion and $4.1 billion. The company also expects to maintain a Rule of 40 score near 118%, a level rarely achieved at this scale.

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 48.33% due to these changes.

VGM Scores

Currently, Palantir Technologies has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for value investors.

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 is part of the Zacks Internet - Software industry. Over the past month, F5 Networks (FFIV Quick QuoteFFIV - Free Report) , a stock from the same industry, has gained 2.5%. The company reported its results for the quarter ended December 2025 more than a month ago.

F5 reported revenues of $822.47 million in the last reported quarter, representing a year-over-year change of +7.3%. EPS of $4.45 for the same period compares with $3.84 a year ago.

For the current quarter, F5 is expected to post earnings of $3.44 per share, indicating a change of +0.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.3% over the last 30 days.

F5 has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.