Palantir Technologies Inc.

Good afternoon. I'm Ana Saro from Palantir's finance team, and I'd like to welcome you to our second quarter 2024 earnings call. We'll be discussing the results announced in our press release issued after the market closed and posted on our investor relations website. During the call, we will make statements regarding our business that may be considered forward-looking within applicable securities laws, including statements regarding our third quarter and fiscal 2024 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 after the market closed today and in our SEC filings. We undertake no obligation to update forward-looking statements except as required by law. Further, during the course of today's call, we will refer to certain adjusted financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, GAAP measures. Additional information about these non-GAAP measures, including reconciliation of non-GAAP to comparable GAAP measures, is included in our press release and investor presentation provided today. Our press release, investor presentation, and other earnings materials are available on our investor relations website at investors.palantir.com. Over the course of the call, we will refer to various growth rates when discussing our business. These rates reflect year-over-year comparisons unless otherwise stated. Joining me on today's call are Alex Karp, Chief Executive Officer, Shyam Sankar, Chief Technology Officer, Dave Glazer, Chief Financial Officer, and Ryan Taylor, Chief Revenue Officer and Chief Legal Officer. I'll now turn it over to Ryan to start the call.

We are thrilled to report tremendous results for our business, driven foremost by strong execution in our U.S. commercial business and continued U.S. government business acceleration. Overall revenue growth, excluding strategic commercial contracts, accelerated to 30% year over year and 10% sequential in Q2. Our exceptional results are a reflection of a market that is quickly awakening to a reality that our customers have already known. we stand alone in our ability to deliver enterprise AI production impact at scale. We are delivering these results in the face of an unprecedented enterprise AI opportunity. As noted by Sequoia, the revenue expectations from the AI ecosystem's infrastructure build-out have grown from $200 billion to $600 billion per year in just nine months. The world is struggling with this huge problem. There's a great bottleneck between prototype and production. The world has also come to understand what we've been saying all along. The standard playbook does not and will not work. It cannot solve this problem. While many companies can build prototypes, the leap from prototype to production is substantial. Palantir has made that leap. Our focus is on deploying enterprise AI in production, solving meaningful problems for our customers. We have the right products at the right time, and our history means that we understand this $600 billion opportunity unlike anyone else in the space. We are uniquely situated, and you see that in our results now. Last quarter, we signed 27 deals worth $10 million or more and closed nearly a billion dollars of TCV. One of the most notable indicators of our delivery is the volume of existing customers who are signing expansion deals, many of which are a direct result of AIP. We continue to see the greatest transformation in our U.S. commercial business, evident in the many AIP-driven deals closed last quarter. Our U.S. commercial revenue, excluding strategic commercial contracts, climbed 70% year-over-year. Our U.S. commercial ACV closed was up 44% year-over-year and up 19% sequentially, while our deal count in U.S. commercial was nearly twice what it was just a year ago. We maintain conviction in our ability to land new customers and subsequently expand those engagements as we sharpen our focus to taking our customers across the chasm from prototype to production. Tampa General signed a seven-year expansion, deploying AIP to deliver a care coordination operating system where we've helped them reduce patient length of stay by 30%. Panasonic Energy of North America signed a three-year expansion using AIP across finance, quality control, and manufacturing operations. AARP shared their utilizing AIP to provide targeted, personalized experiences for their 29 million unique visitors on a monthly basis. Eaton deepened our relationship, leveraging AIP to modernize ERP deployments in addition to finance, sales, and supply chain use cases. Kinder Morgan signed a five-year Foundry and AIP enterprise expansion with production use cases including storage optimization, pipeline integrity monitoring, and power optimization. These are just a handful of the significant expansions last quarter into production with AIP, and the magnitude of expansion is notable. A major North American industrial company started working with us in late 2022, expanded to a $5 million run rate in 2023, and further deepened engagement to a $20 million run rate this year. One of America's leading hospitals began working with us in 2021, generated approximately $1.5 million of revenue in 2022, over $4 million of revenue in 2023, and is on track to generate nearly $15 million of revenue this year. With regard to landing new customers, U.S. commercial customer count grew 83% year-over-year last quarter. Boot camps remain a key go-to-market motion, particularly for prototyping what is possible with AI, but the real opportunity and our unique capability lies in moving from prototype to production with these customers. That is where we are focused. We closed a seven-figure deal with a large wholesale insurance brokerage firm for an initial production automated policy review use case just 16 days after the boot camp. A leading convenience store chain went from prototype at a boot camp to paid pilot in 25 days, then converted the inventory management and pricing optimization use case into initial production immediately following the pilot. Our product charisma remains unparalleled. We plan to leverage this combination of boot camps and pilots with a focus on moving towards high-value production use cases to continue landing new customers. At the same time, we are heightening our concentration towards building deep production-level relationships with every single customer. The phenomenal strength of our U.S. government business shows the power and scale of our enterprise software delivery. our US government business continued accelerating, growing more than 8% sequentially for two consecutive quarters. We proudly received several notable awards last quarter, including a production contract from the Department of Defense Chief Digital and Artificial Intelligence Office, CDAO, to deploy and scale an AI-enabled operating system across the DoD, starting with an initial order of $153 million to support certain combatant commands and the Joint Staff, while additional awards can be made up to $480 million over a five-year period. This award reflects the criticality of our software in our nation's defense capabilities. Shortly after, CDAO announced a new initiative, Open Dagger, to enable defense tech companies, traditional contractors, and government developers to develop applications and integrations on top of Maven, powered by Palantir, in a contract worth $33 million. We maintain pride in the mission-critical impact of our products and celebrate the long-term strength of our U.S. government business, evident in last quarter's results. Looking ahead, I've never felt more bullish about our business than I do today. We're charging full steam ahead, leading our customers across the bridge from prototype to production, with our ever-expanding product capabilities laying the paths for that journey. I'll now turn it over to Sham to share more details. Thanks, Ryan.

Our customers have been ahead of investors in markets. Customers choose us not because we're delivering proofs of concepts, but because we deliver proof. Years of foundational investments in our infrastructure, and in particular in ontology, I'll note a widely ignored and discounted innovation, have put us in the pole position. Gen AI has made prototyping incredibly easy and charismatic, but with the same utility of a PowerPoint slide. The journey to production, as the market is now discovering, is fraught and requires a foundational set of technologies that we have uniquely invested in, creating the product pipeline that's needed to harvest economic value from AI. And that's a journey that we were pathfinders on with the U.S. Department of Defense starting in 2018, and one we continue to be the leaders in across both segments, government and commercial, today. The bottleneck and the transition from prototype to production is a very hard set of technical problems. We didn't build those technologies eating berries in San Francisco. We had to be on the factory floor, in the foxhole, eating pain with our customers, seeing the secret truths of what does and doesn't work and metabolizing it into product. This has always been the secret of Palantir. It is the anti-playbook. Today's AIP developers will be the enterprise's next generation of builders. Apollo delivers eye-watering agility and responsiveness. AIP deprecates back-end development the same way that hyperscalers deprecated infrastructure, providing the mechanism to bring AI into production in the enterprise quickly. Our builder investments are feeding our product pipeline with our customers' developers in the wild. Compute modules have enabled the integration of our customers' own containerized applications into operational workflows. Today, this technology is powering exquisite missile warning systems in the U.S. government and sophisticated production plan optimization across commercial. And Ontology SDK has enabled customers to build their own pro-code applications backed by Ontology, the critical ingredient for harnessing LLMs in the enterprise. And we pulled all these investments together in Code Workspaces, where we have enabled an end-to-end development environment that lets customers treat their business as code. These investments have made us the emerging choice, not only for application developers, but also data scientists. Our platforms have become the fastest place for our customers to develop, refine, and manage not only their models, but integrated offerings that deliver business impact. Once again, history is repeating itself with data scientists as they abandon the thin playbook products of the past. We recently hosted two Champions Road events, one in Denver and one in Munich, that pulled together the most experienced and prolific customer developers to share the latest on our roadmap, but more importantly, to service new opportunities to go deeper. At build.palantir.com, developers in the US, UK, Canada, and India, amongst a growing list of countries, can now access a free developer tier and a library of quick starts, tutorials, and reference implementations for themselves. This developer movement is matched on the government side, whether it's with developers in Armed Forces Ukraine or the US Army. In government, CDAO's recent contract award on Maven will enable us to scale those exquisite capabilities to the DoD enterprise and to bring integrated JADC2 capabilities across space, cyber, electronic warfare, and logistics. The CDAO Open Dagger contract also enables defense tech companies, traditional contractors, and government developers to leverage Apollo and the Ontology Software Development Kit, OSDK, to develop applications and integrations on top of Maven, all powered by Palantir's mission manager. And finally, fresh out of the AIP product pipeline, we are launching a new offering, Warp Speed, to power American reindustrialization. The software playbooks have also failed in manufacturing. And all the founders driving reindustrialization know it. This is why SpaceX built their own ERP. We created Warp Speed from our years of experience on the factory floors, helping customers build planes, trains, automobiles, and even ships. Today, we power production of jet engines, satellites, and weapon systems in the industrial base. Warp speed, built on AIP, on our industrial AI, and with ontology, is the modern American manufacturing operating system that reimagines how to bend atoms better with bits. At the dawn of World War II, we didn't have a defense industrial base. We had an American industrial base. Chrysler made missiles, and General Mills wasn't just a cereal company. This is also what our future must look like. It is clear that the nation must reindustrialize and mobilize at warp speed to win. This platform will transform production in the value chains that power our kill chains. I'll turn it over to Dave to talk us through the financials.