Palantir Technologies Inc.

Good morning. Welcome to Palantir's fourth quarter 2021 earnings video conference. We'll be discussing the results announced in our press release and related materials issued prior to the market open and posted on our investor relations website. This morning, we will make statements regarding our business that may be considered forward looking within applicable securities laws, including statements regarding our first quarter and fiscal 2022 results, management's expectations for our future financial and operational performance, and other statements regarding our plans, prospects, and expectations. These statements are not promises or guarantees and are subject to risks and uncertainties which could cause them to differ materially from actual results. Information concerning those risks is available in our earnings press release distributed prior to market open today and in our SEC filings. We undertake no obligation to update forward-looking statements except as required by law. Thank you. Thank you. Thank you. Our press release, investor presentation, and SEC filings are available on our investor relations website at investors.palantir.com.

Welcome to our earnings call from Denver. It's my maiden voyage. And obviously, just a couple opening remarks, and then we'll jump into questions from the audience, as it were. Just a five-minute, two-minute. When Palantir began, people believed that data was worthless, that software was a luxury item, and that we would fail. And One of the very interesting things that's happened to Palantir is we've been able to see how the world has changed dramatically in its perception of software and, of course, of us from a world where software was something that you might want, might be in your car, but de facto would not determine your business to a world where really the laws of finance are going to be changed. rewritten to deal with a world where the only real moat is software. How do you measure it? What does it look like? How do you understand when it's creating value? How do you understand when it's declining in value? How do you understand when it's compounding? To what extent is it compounding? What devices do we use to measure that? Are the devices we use to measure it the ones that we used in the past? Clearly, this industry is in its infancy. What's also very special about this industry is it really is by and large geographically located in a small section of America. which is odd and there's lots of interesting reasons for that, but enterprise software is something that America is by far the best at. What we see currently at Palantir, it's not just the best at building it, it seems to also be the best at understanding what software developments are relevant for the world today. and adapting even when it's being offered by a company that in every way looks nonstandard, run by people that are very different, look different, feel different, talk differently, and with a CEO that many view as batshit crazy. And so just as an interesting prelude, I don't want to take a ton of time with remarks because I think You know, when I'm watching these things, if someone talks too long or there's like a lot of canned remarks, I wonder why. And it honestly gets a little boring. And, you know, of course, our legal department and IR department, which are wonderful departments, have a cane ready to pull me out if I'm not like a caged animal in the 1950s zoo. As I've mentioned to them, if you want caged animals in the 1950s zoo, you can watch any other earnings update videos. So here you see an interesting chart. We sent this out. Some of you have probably looked at it. Some have maybe even studied it. Some of you haven't seen it. What's interesting here, what I thought would be very interesting for people who are investors, potential investors, also Palantirians, both current and ex-Palantirians, is our journey, and what I actually believe this is a metaphor for the journey of all software companies. We were very early into whatever you want to call data exploration, building things that would now be understood as useful software for building analytic tools. Some of them were and are very, very important for national security and other areas. But then we're not – obviously because they were built and conceived in 2004, delivered in 2008, we're not actually able to migrate across the chain into what people need tomorrow or people already seeing that they need today, which is essentially – Not having software as a raw material exploration, you take the data like it's oil, you pump it out, you churn it, and then you say you've churned the data and you move on, but actually operationally determinative for your business. What you see here is cohort analysis. This is the – and what you see is from inception of Foundry, the decline of older software products and just the massive exponential growth. Obviously, it's rough math. It's 100 percent growth year on year. And then starting last year, not off of a small integral, which is obviously very important because, you know, small numbers can grow quickly even if the software is not strong. Big numbers don't grow quickly if the software doesn't exist, especially given that our sales force is super nascent. We're building it quickly, but we only have 25 fully accredited software. Fully accredited meaning they've been here for nine months or more. And what you see here, obviously the CAGR here is just unbelievable in like the 150 plus range, which is incredible. Super interesting, and I wanted to drop the F-bomb here, but I was told that was probably inappropriate. We've agreed that this is something like the Phoenix Rises. You don't get this. The other thing that's kind of anti-gravitational about this that it's easy to forget, this is a company. We've been at this for over 15 years. There are certain laws of nature in business that we are defying. which is that a software company's software usually decays for lots of reasons, decays radically. And so when you see a decline or a software product, it's also basically not part of the law of nature for a software company to build new software. Really, as far as I know, we are the only software company in the world building transformational software products. this far in. And that's particularly important because most software companies have distribution or they have a product, but they don't have distribution, product, and the ability to build new products, which is not a critique. These are great companies. They acquire companies. There are not that many companies to acquire, which is why even relatively weak companies get acquired at a very high price. Let's just look at the next chart, which is USG. you have a very similar phenomenon where you see the inception of of foundry into the USGA. There's a lot here. There's a lot of qualitative stuff here that we can't explain, but one of the qualitative things that you kind of can get a sense of is the newer foundry version not only grows, grows dramatically with like, you know, this is like 65% growth just without looking at it more precisely, but it's It's like over 200% CAGR here, which is also like Phoenix Rises kind of thing. But what's qualitatively particularly important and very protective is this graphs pretty neatly onto what are the programs that are going to grow tomorrow. Where is the future of USG? What do we need in a world where people are recognizing it's very dangerous? And what would the products be that you would need to power that? And so in any case, with that, I think we should head into questions.

Great. Thanks, Alex. Our first question is from Brent Thill with Jefferies. Brent, you'll receive a prompt to unmute, and please ensure your video is on.