Palantir Technologies Inc. (PLTR Quick QuotePLTR - Free Report) reported explosive revenue growth from its U.S. operations in the first quarter of 2026, along with profitability and strong cash flow. The increase in revenues came from both commercial and government customers due to the rising demand for its artificial intelligence platforms. 

Palantir Technologies reported first-quarter revenues of $1.63 billion, up 85% from the prior-year quarter. U.S. revenues surged 104% to $1.282 billion, according to investors.palantir.com. U.S. commercial revenues rose 133% year over year to $595 million, while U.S. government revenues increased 84% year over year to $687 million. 

The company closed 206 deals worth at least $1 million during the quarter, including 72 deals for $5 million and 47 for $10 million. Total contract value (TCV) rose 61% year over year to $2.41 billion. 

A key indicator of future revenue visibility, U.S. commercial remaining deal value (RDV) increased 112% year over year to $4.92 billion, reflecting sustained demand for its battlefield AI software, including Maven AI. 

Profitability Expands Sharply

Palantir posted GAAP income from operations of $754 million, representing a 46% operating margin compared with $176 million in the prior-year quarter. Adjusted income from operations climbed to $984 million, with adjusted operating margin expanding to 60%. 

GAAP net income attributable to common stockholders more than quadrupled year over year to $871 million, or 53% of revenues. Diluted GAAP earnings per share came in at 0.34 cents compared with 0.8 cents a year earlier. 

Adjusted EBITDA totaled $990 million, representing a 61% margin. The company’s Rule of 40 score, a metric that combines revenue growth and adjusted operating margin, reached 145%, reflecting accelerating growth and expanding profitability. 

Cash Flow Remains Strong

Cash from operations increased to $899 million from $310 million in the prior-year quarter. Adjusted free cash flow rose to $925 million, representing a 57% margin, compared with $370 million and a 42% margin a year ago. Palantir reported $8 billion in cash, cash equivalents, and short-term U.S. Treasury securities at the end of the quarter.

Outlook Raised on Strong U.S. Demand 

Palantir raised its full-year 2026 guidance. The company now expects fiscal 2026 revenues between $7.65 billion and $7.66 billion, implying annual growth of about 71%. It also raised its U.S. commercial revenue forecast to more than $3.22 billion, representing growth of at least 120%.

For the second quarter, Palantir projected revenues between $1.797 billion and $1.801 billion, along with adjusted income from operations between $1.063 billion and $1.067 billion. 

Chief Executive Officer Alex Karp said the company’s performance reflected the growing adoption of AI-driven software platforms and expects expenses to increase in 2026 as it continues investing in product development and technical talent. Palantir has also obtained a $300 million contract from the U.S. Department of Agriculture in April 2026.

In a letter to the company’s shareholders, Karp said Palantir’s platforms are increasingly being used in mission-critical AI workflows across both commercial enterprises and government operations, contributing to its record revenue and profit growth. Palantir currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.