shares of Palantir Technologies (PLTR-14.24%) fell 14% on Monday after the data analytics provider’s earnings forecast fell short of investors’ expectations.
Palantir’s second-quarter revenue rose 26% year over year to $473 million. The profit increase was fueled by a 27 percent increase in the software company’s sales to the US government.
Palantir is also making progress on its plans to diversify its business. Commercial revenue increased 46% to $210 million. Palantir’s growth has been particularly strong in the US private sector, with US commercial sales up 120% and customers up 250%.
In a letter to shareholders, CEO Alexander Karp said:
The strength and momentum we are seeing from our customers in the United States reflects the refinement and maturity of our software platforms, which we believe will continue to result in rapid widespread adoption across all regions.
Despite this, Palantir is not yet profitable. It generated an operating loss of $42 million. Palantir’s investment also weighed on the bottom line, resulting in a net loss of $179 million.
Excluding stock-based compensation and certain other items, Palantir reported an adjusted net loss of $21 million, or $0.01 per share. That was below Wall Street estimates, which called for adjusted earnings per share of $0.03.
Investors are disappointed by unexpected losses. They, too, were not enthusiastic about Palantir’s guidance. Management is forecasting full-year 2022 sales of approximately $1.9 billion and adjusted operating income of $341-$343 million. According to Bloomberg, analysts had forecast adjusted earnings of $527.9 million. Palantir had previously forecast an adjusted operating margin of 27% for May.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has held positions of and recommends Palantir Technologies Inc. The Motley Fool has a disclosure policy.