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spk01: 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.
spk00: 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.
spk01: 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.
spk02: Thanks. Good morning, Alex. When you go back to the sales, by the way, we can't we can't see you through your your overall view on what you need to do on the sales force to to get that building in the right direction and what your plans for capacity are added in 2022.
spk00: By the way, it would have been wonderful to see you. But, yes, I think the question was, what can we do to build on our building the sales force next year or this year and the next year? So there are really two parts to the question. One part, I think, is just to look at what's happening. And so, like, what is growing Palantir now and how can we accelerate it? So if you just – what I want to do in this call and in future – encounters, is to both, is to kind of, what I think is happening, and just to frame the question, what I think is happening at Palantir is you have what you saw in Silicon Valley 1.0 when Silicon Valley actually produced goods and services that people wanted, which was they built dual product, dual use products in government, and there was a handoff to commercial. And so that's going very well. So you see, even if you adjust for SPAC, organic growth in commercial last year, U.S. was 80%, or Just under 80%. It was like 76%, 77%. But to your point, you see net dollar retention numbers, numbers that you financial people like. How much is it growing? What I would call actually organically, I guess you guys call net dollar retention. Very, very strong, like in the 150 range. We have Glazer here. Yeah. pipe in with the – but it's roughly in that range. But what we do not have – you could look at it as a negative. It's like we basically are doing this with a very, very nascent – honestly, if I were not on TV, I would say bonkers small sales force. And so like that means two things. What does it mean on the positive side? It means that net dollar retention number is – awesome because my understanding of how this happens at other companies is like eight people running around begging the person to expand their deployment. That's not happening at Palantir. The salesperson there is the foundry product by and large. So obviously that means we think we can get Lyft from hiring salespeople. We're doing that aggressively. I think we have about 150 salespeople now. We're in the market to hire aggressively across Palantir. Honestly, mostly not salespeople because we believe we live and die based on our ability to build products of tomorrow, deliver today. But we're going to hire in the range of 200 people. Hiring and getting value out of them are two different things. And so I think One of the things that we will see going forward is how do we play these salespeople so that we can get as much lift from them as we're getting from the product itself. And we're at the beginning of that. And so it is the part of the people we've fully indoctrinated or, as normal people might say, trained, are effective. But we've never done this before. That's a process. We're also looking at ways to learn from other companies. But that's going to happen over the next couple of years. The primary driver of revenue in US commercial this year will still just be the way in which America, the IT organizations are actually beginning to request without knowing Foundry sometimes what Foundry offers. The CEOs assume that this is available. There is no other product on the market that can actually move from, you know, data warehouse, which is like there's like five companies. They all offer the same thing. Foundry interacts with all of them. When you want to move up to the chain to actually solving a real problem because it's the defined your business foundries, highly differentiated. So we will layer that. I think it's way too early to know exactly the impact. Um, obviously to the extent we get this to work, you could expect even higher growth than, than what we have. Although, uh, I'm very happy with it. It was like we've doubled US commercial now from 50 to 100, 100, 200. I believe we will double it again this year. In any case, some of this is unknown, but we are working very aggressively. The other thing I would say outside of the US, again, a slightly longer answer, but one of the ways people look at Palantir is if you're going to – I think a financial analyst likes to, what we would have called in science, normalize the data, what you in finance would probably call strip out the inorganic inputs. But I think if you're stripping out the inorganic inputs, you also have to look at what I would essentially view as an inorganic input of COVID in Europe. If you strip and so Europe has been slow for us last year, which is one of the reasons why, you know, we are only at 41 percent last year and growth would be even higher. Europe grew if you include SPACs at 9 percent, so slightly above what's probably inflation. But there we're taking the opportunity, believing there'll be a handoff from USG. to U.S. Com, to Europe, to rebuild with some very, very strong salespeople who've come from the best companies, believing that that's an environment where we can really do that. So, like, there's two ways to look at this. Just on that angle, you could say, well, what could you do to gas charge America? We're working on that and very, very aggressively, and most of our sales hires today are focused on that. But there's another more long-term thing. If we're right that the world wants Silicon Valley the way it was, meaning a handoff from government to commercial to the rest – commercial U.S. to the rest of the world, and each one with a lag, America to Europe, 18 months – The rest of this company only has to grow everything besides Europe commercial 38 percent to get 30 percent growth in aggregate. So getting Europe to track better, both from a handoff of what happens in America to Europe and with more conventional sales approach is kind of what we're looking at getting done this year and see the fruits of it next year.
spk02: And just a quick follow-up on the government. I know you had a tough comp. It did decelerate pretty materially in Q1 in terms of the growth. Can you give us your perspective on what's happening on the government side?
spk00: Well, there's a couple things that are happening there. So if you were if you were looking at this more like from a scientific perspective, you had a time series of 15 years. First thing you would do is say, OK, what's happening in that time series over the 15 years? What you see in U.S. Gov is a compounded growth of 30 percent. But like this, which is, you know, the positive of U.S. Gov is it's reliable. The sums are big. The quality of revenue is very high. There are a number of problems, but the biggest problem is barrier to entry, which we've clearly solved, and then re-barrier to entry, which we've solved or are solving, but that's going very well. And then the second one is lumpiness. Now, that lumpiness still exists, and actually in some ways it's worse because to get the integral to grow, you need these massive deals involved. We also have small deals, but de facto, we are on the biggest, most important parts of the U.S. government, our software is. So there's really a twofold answer to your question. One, what will happen this year? Is the deceleration an actual one over a long time series? The answer is clearly no. But then the question is, if the baseline is 30, how does it get higher? to where we won it, which was like the beginning of last year and not at the end of last year. And the way that happens is the deals were already positioned to win actually close. And so then you get into the granularity of what will happen in the U.S. government, who gets the deals if there's no new budget. There's a lot of granularity there, which we should probably do a better job of sharing. But the short answer is it's like whose chair gets pulled first. The people are trying to enter the market first, last. So the new startups, totally screwed. because the people who are not sitting on crucial programs, partially screwed. The people that have software or products that are useful in the past, but have the right connections, probably do. Another version of this is, if you just look at that chart I showed you with the CAGR, on Foundry. These are the most important programs for a dangerous world. Now, can't go into all the details, but, you know, we used to debate with people, especially my academic friends, if the world was dangerous. The danger of the world being clear and present to the U.S. government is... very protective it doesn't guarantee that you know when this integral actually how it behaves but it makes it much more likely that it will happen in year and positively affect our revenue which is another reason why i suspect uh that that we will um do well great thanks brent our next question comes from palantir shareholder chase p
spk07: Yeah, thanks so much for fielding my question. I really appreciate the opportunity. First and foremost, congratulations on all the hard work. It seems like you guys have a great team and are executing really well. From a retail investor perspective, the most negative sentiment I hear regarding Palantir is in regards to the dilution of shares outstanding over the past 12 to 18 months, and primarily in relation to stock-based compensation that's occurred. Other than the remaining shares to be vested that have already been announced, can we expect further dilution in share offerings going forward? Or is it kind of reasonable to assume that the majority of this was from the IPO process and sort of a one-time event for the company? Once again, thanks and congratulations on all the hard work and business developments.
spk00: Thank you. And I really appreciate you, investors. Thanks for investing in the faith you have in us. OK, so there's there's there's like the simple version, which I think, you know, it's like so there's really there's stock based comp and there's dilution dilution thing. That's a red herring. We're not issuing a lot of. New shares, I think it's like in the $9 million range. And so it would be a little coy of me to say that's like no issue, move on. The thing to understand about Palantir, and then I want to just hit this, is like it's actually not the result of the DPO. It's the result of the fact that we were completely focused on building product. We had no earthly idea we were going to DPO until like right before we did it. And so most companies are – I mean, quite frankly, built so that when analysts look at it, the primary customer of most software companies is not the client. It's the software analyst. So it's like we obviously, our primary client are our clients, which doesn't mean – now we're thinking about how do we expose the data. in a way that people on the outside like you and professional analysts and others can look at the data and get a better sense of what's tracking, what's not tracking. But the primary source of a lot of these questions really comes down to, look, we built the company to support the U.S. warfighter primarily and then dual use it for the glory of humanity, particularly humanity in the West. That was our idea. And because our primary client was not what someone at a hedge fund would think, We didn't actually think of these things from inception. And so now there's a process of normalization. You're going to see that in going forward on these calls. It's like, how do you normalize? How do you provide data that people can look at? How do you provide data that people can understand that they're used to seeing while simultaneously staying true to what our mission is? It's like our primary clients are the people we're serving. We're in full line with them. And that's why we survive. Even with the nascent sales force, you can get things to double dramatically. which is insane. So then you get to stock-based comp, which is like, okay, so there's two parts of it. Of course, IRI people kind of don't want me to do any kind of forward-looking math, but if you're smart enough to invest in Palantir, you're smart enough to figure out there's essentially – how are we comping people? And there will be a normalization that will get us into – a range where you would see in a software company within the next 18 months, the latest two years. But there's essentially, and that's going to take a little time, it is going to happen because it's also very much linked to another question, which is how do you actually run the company so it's profitable someday on a gap basis, not stripping out comp. And that is also within eyesight. And those are goals for Palantir because same reason we have no debt, same reason we have $2.3 billion on our balance sheet. This is a company built for bad times. Bad times mean strong finances internally. And that means at some point you have to be profitable. You can't be profitable if you're diluting people or what you correctly your your your your your stock based comp is totally is not in conformity with other companies. So you're seeing a normalization. This will change. It will change in the relatively near future. It'll be linked to other things that we believe are important for Palantir, like having a company that thrives in bad times. Bad times are very good for Palantir because we build products that are robust, that are built for danger. And then the finances internally are actually built for bad times. And bad times means you have free cash flow. The free cash flow turns into gap profit. That means the stock-based comp has to be one that's aligned with our investors also because that's basically – it's part of a little bit longer philosophical narrative. But like if software is the only moat, then value and growth shares have to be evaluated in terms of their value. Value only exists if you can actually get a tech moat, call it – maybe it's something besides. And growth only exists if you build a company that is where the technology is strong enough – the business fundamentals are strong enough that the free cash flow actually turns into gap profitability, and that's linked to StockX. So this is a priority both because you care, but also, quite frankly, because it is the health of our company, which we care a lot about.
spk01: Great. Thank you, Chase. Our next question is from Keith Weiss with Morgan Stanley. Keith, you'll receive a prompt to unmute, and please ensure your video is on.
spk03: Excellent. Thank you guys for taking the question, and thank you, Alex. And neighbors in New Hampshire. Upstate New York. Close. Well... So, two questions. One on the product side of the equation. And the other on sort of investments into 2022, on the product side of the equation, Alex, maybe I hope you can help us sort of better understand the product roadmap on a go forward basis, how you guys are thinking about it from a high level. From our perspective, you guys did a really nice job of better modularizing the platform and made it more robust. um adoptable by commercial enterprises and and i think it looks like we've seen that traction in terms of customer adoption um what's kind of the the on a go-forward basis is there more activity of that ilk if you will do you create more like um pre-built solutions, if you will, more directly target some of these sort of opportunities that you've been used for, but productize it, if you will. Is that a potential product direction? And then on the other side of the equation, in terms of investments, investing for growth into 2022, I was hoping you could give us a little bit of visibility into the nature of those investments. Is it just sales headcount? Is it the forward deployed engineers? How should we think about where those dollars are being deployed? Thank you very much.
spk00: Thank you for your question. So actually, to my perspective, they're very much linked. Our primary investment in growth is investment in product, and we're doing a number of things in product. The things we've talked about at a general level is kind of making our product more modular. There's a slightly more macro riff here, which is that we were adversarial with IT structurally until recently. We were adversarial because... From our perspective, there's a learning process where they had to build these things. Now there's a myriad of companies. They're all honestly technically hard, indistinguishable, doing data lakes and all sorts of things that help IT people build something that is working for them to do certain things. And we were adversarial because they were like, okay, this foundry thing, yeah, great, but we've already built these things. You would replace this. It honestly could also make us look bad. No one wants it. Also, the average sale price for Palantir foundry across our business I think last year was like $6.5 million. Most IT people prefer a small bite and consumption. You can argue whether that's the right model, but instead of fighting them – it's probably better to figure out a way to get our product more in their hands. So that's kind of the known part. What we've been working on recently, which is less known, is what we're really working on is we believe that people are paying a lot now for consumption and compute. No critique. But in reality, that's very much like paying for gas and oil exploration. But what people are really going to want is the ability to use the fully digested product. It's like when you drive your car, that's minerals and oil products and all sorts of chemicals built into your car, finished product. And we're going to build both modules that are reflective of Foundry, but also new ones in areas that we understand and, quite frankly, we know will be built in the near future so that things we know are working, things that we suspect will work in the future, so that the nodes not only work separately but can work together. So de facto, we believe the compute of tomorrow won't be just compute. It will be productized compute. And that's what we're actually working on in rebuilding Foundry. So there's still – that doesn't mean like the Foundry as an aggregate we can do the whole thing tomorrow thing. Massively valuable, and we're working on very, very large deals where companies are like, look, we want to transform what we're doing or take what we're doing and export it to every company in our industry tomorrow. De facto, that's a founder use case, and I don't think there's anything else that does that. Because you can take, for example, there's a very large company in the healthcare space, and it's like they have a very interesting way of doing healthcare. They can't sell it to other people without that essentially being a software offering. Building that would be three years, or it could be two weeks. So that we're very much committed to continuing doing because we're an N of one there. But where we want to be is an N of one on not just making it small. We like that because then... We see the IT departments now saying, okay, we have all these things, and now we want to migrate here, and then selling them something that they can actually bite into. Because the primary resistance to Palantir has never been lack of sales force, lack of – it's been resistance on the inside of the IT structure. And so now we're going to give them something they want and then also build an ecosystem around it so it's what I think people will want going forward. And so people can stop just buying pure compute. They can buy – Valuable compute. So that's actually a big project. I would say on that end and on these other ends, what's particularly interesting, I mean, it's obvious, but it's not just the dollars. It's like who's spending them. Just like the charisma of what we're doing. We're a company that's like 15 years old from revenue, 18 years old from concept. A company like ours should be getting declining talent. The talent we're getting now is the best in the world. It's the best we've ever gotten. And we're getting people who used to be at Palantir. Everyone knows how good our people who are coming back. No company of our pedigree gets people coming back. The reason they're coming back is because this is just fucking cool. It's like you do this, you change the world. Now, there's a lot of other things we're working on the side to actually make sure. One of the things we failed at... honestly, is capturing the value of what we've done. Most of the products you would see on a map in an industry, any company, they're delivering things we built seven years ago. We failed in capturing the value of that. We're not going to fail again. We failed in capturing the value of that because we were selling to IT and selling to people in an adversarial way. And sure, we were seven years, eight years ahead, but eight years ahead, but they can't actually interact with you That's not the right way to do it. And we're not going to do it that way in America. So we're building specialized sales, which means it will take longer to get it to work because we're working. And in Europe, we have a differentiated on the on the idea that. So if you just look at the raw numbers, if you look at like, you know where we're investing in, it's like sales hires, very high end salespeople in Europe. And then the rest is just like the best tech engineers in the world because we know we get them, we retain them. And it's just very differentiated.
spk01: That's super helpful. Great. Thanks, Keith.
spk04: Our next question comes from Palantir shareholder Brian L. Dr. Carr, thank you for taking my question, and thank you for furthering the ideals of Western democracy around the globe. Of the 1,000-plus roles that you intend to hire this year, how many of those will be focused on sales?
spk00: So we're we're looking to hire 200 salespeople, basically, and everyone else is like just like in the past. So the way I think about it is like 70 X salespeople. It's like still 75 percent technical. We're going to try and hire 200 salespeople. And then, as I mentioned, we just hired some very high end sales acumen in Europe. Yeah. Thank you for your question and thank you for being an investor.
spk01: Great. Thanks, Brian. Our next question comes from Mark Cash with Morningstar. Mark, you'll receive a prompt on Mutual Line, and please ensure your video is on.
spk06: Yes, thanks for taking the question. Kind of going off what you were just talking about, there's been commentary in the past around becoming the operating system for commercial industries. You talked about airline industry, maybe just talked about healthcare for a little bit there. But are there other examples, industry examples, you could talk about how that's pulling in customers to standardize operations around Palantir? Thank you.
spk00: Uh, thank you. Um, well, um, there are a lot of, like a lot of the new deals we're working. So it's like, if you look at the timeline of Palantir, um, two years ago, it was all kind of three years ago. It was like analytics and operations. And what you see now is kind of people building off of what, wanting a standardized productized version of what we did at Airbus, what we've done internally at BP, uh, what we, what we did with Lilium, uh, And and so what I can tell you is like of the very big deals we're working on now, they're almost all this. It's like we used to have to educate people. They didn't believe us. And, you know, it's interesting. I do think it's like obviously there was also just the covid distribution thing. I mean, covid distribution in England. England is not one health care system. It's 600 hospitals that are countries. It's like 600 countries, and this is true. And so just seeing this happen or networks of people hearing this happen is the reason why you have 80 percent organic growth in the U.S. ex-SPAC. And with almost no salespeople, it's because people are now like, OK, now the caveat here is this is not for everybody. So there's like not everybody wants where this is particularly valuable as you have a business that is not protected properly. by a moat that has real insights on how to do something and wants to take over their industry. So it's like you're sitting there, you have a product that is maybe the best in the world, maybe the second best in the world, but it's not protected. But you do have insights that are further in software you could take over your market. And that's where we're seeing it. The thing that's really changed is for once – It's not me fighting my way into the person's office and then throwing me out. It's them calling and saying, no, we know this can work. The pilot phases now are like days. And we're working on two or three of these now. It's like, it's just, it's very, very exciting. The one thing I would say as a caveat, though, is it's a little bit, we are both working on this and working on modularization with equal force. And they're just not the same thing. Somebody who wants this is not buying modular Palantir. They want the whole Foundry thing. And what they want help with is like, well, how would we identify people to hire to write to your platform? That's actually a big new question. Like, Where can we find people? They don't have to be talented or quality software engineers. Those are just too rare. But what we're doing with our platform is making it so that just smart people can actually write to it. And so that increases our TAM a lot because smart and smart enough or specialized smart to write code at the level you write it here, those are just completely different TAMs. Thank you.
spk05: Hey Alex, thank you for taking my question. And my question to you is, in a recent interview, Shyam said that what AWS was for developers last decade, Foundry really will be for developers this decade. Can you expand on what Plants Foundry has to make Foundry available to a broader developer community? Again, thank you for taking my question and thank you for allowing a retail investor like myself to have a seat at the table. It's much appreciated. It doesn't go unnoticed.
spk00: And I have all my assets in Palantir. So I'm very happy to meet another retail investor. Hope any case. So, you know, we've we've done these like founder for builders programs in America and in France. And like, you know, it's not charity. It's because we want people in the tech community broadly to learn how to write to Palantir. We also want to learn from them. So that's one very important program, not revenue-based, but it's essentially very valuable for our tech development and very valuable to get technically literate people on Palantir so they can see what they can do and tell us what they can't do. Then there's the broader commercial. You know, a lot of the companies we've supplied and government agencies like the Palantir, it's like they require an ability to write to Foundry or to one of our products as like a core competence. And so one of the things we know, so we're obviously figuring out ways how we can train people, how we can make that experience easier, how can we widen the aperture. And by the way, obviously not just because, you know, it's like, It's not just for the altruistic reasons that are obvious. It's like if you want people who are valuable now to be valuable tomorrow, they must be able to interact with the software platform. So that's like one of the reasons we've had a lot of adoption, because if you take, you know, a company like Chrysler Fiat, which has very talented people and. they need to be able to write to the platform and then work with the platform. So we're working on that partly for political reasons and partly because, obviously, it's very good for you as an investor and palantir, and we're proud of that.
spk01: Great. Thanks, Juan. Our next question is from Phil Winslow with Credit Suisse. Phil, you'll receive a prompt to unmute your line, and please ensure your video is on.
spk08: Thanks for taking my question, and I do appreciate the cohort data that you disclosed today. That was very helpful. Just to dig in on that a little bit, Alex, you talked about starting to see inflection where Palantir is getting pulled into some of these commercial deals, sort of asking for Palantir without even knowing. That's what they needed. You see that in the cohort number on the commercial side in terms of the new for 2021. I'm curious if we can just dig into that a little bit. Are you seeing specific industries really start to have that aha moment, get it? Are there certain use cases that they're leaning into? And then just have one follow up to that.
spk00: You know, what makes Palantir Foundry valuable is that it's not really industry dependent. And this is crucial for us because our sales force is so nascent. So we're very dependent on where either there's a crisis or where, again, that crisis or where somebody actually wants to enter a market they're not in and wants to expand. So I would say in the past, We were very, very dependent on manufacturing, so like our high-level engineering companies like BP and others, because we de facto needed the engineering talent because no one else believed us the product was differentiated. Now it is much more standard businesses of all kind. All kinds. And so just like really the who's who of American business from from like people building tractors to building cars to oil and gas to distribution. And there's no one kind of company where we're where we do not do well is like, yeah, we're not going to sell to a marketing company. You know, it's like that we're not that we don't we don't bother talking to them. They don't call us. We're not good at marketing. They apparently are. They're so good at marketing. They don't have to quantify their results. We don't we don't. Yeah. So, by the way, one of the places, you know, Europe, one of the interesting ways to look at our business, by the way, since you're in Europe and since I. have an affinity to your region, Liechtenstein, Schweiz, is that Europe in general has grew slower, and that's the You know, if you assume that comes back online, it's just going to be bombastic. One of the places that were actually very strong in Europe is Switzerland. And there you have like a lot of the pharmaceuticals, insurance companies, banks. That can't be mentioned using our products. And I think they use it honestly because it's like there's a Swiss quality to pound here. It's like a very high quality product. We deliver it. It will work. You're not going to get the charming slap on the back or the steak dinner and your software is going to fucking work.
spk08: And then just to follow up on that specifically, because obviously the net retention numbers that you have in U.S. government, government general is huge, U.S. commercial is huge. That's one thing I noticed with the disclosure of the net retention is non-U.S. commercial is significantly lower. What drives that and how do you sort of inflect that higher?
spk00: Well, you know, first of all, I do think there's a handoff function. And I think these things are actually repeating what happened in the earlier days in America when is like where you have a handoff built in government because you have more time to actually get it right. hand off to commercial, go to Europe. I do think in general, certain Swiss institutions, certain German institutions, certain French institutions, you know, are not included where it is slower. Like if you are building something very, very new, it will be adopted a little later. But then there's also just the COVID. You know, the reaction to COVID in continental, in Europe was different than in America. While it slowed things down in America, it didn't really stop them. And and so I kind of what I suspect is going to happen is that Europe, because of covid reopening and because of basically people copying what's happening in highly adaptive America and sometimes in Switzerland, you will see the the the the European cohort. grow. But again, to just make it a little more quantitative, we have, I think, 150 percent net dollar retention in U.S. commercial. Again, a number which we're getting with basically no one holding it up. So I don't know how this works at other companies, but I think if I were a scientist, I'd want to normalize that number. But even non-normalized, this is a very strong number. What we are going to show is net dollar retention in the U.S., and over time, we're going to show how this expands outside the U.S., And that that I think what you'll begin to see is that this strength in the U.S. will go outside the U.S. and will make our business very, very robust.
spk08: All right. Thanks for your time today. Appreciate it.
spk01: Thanks, Phil. So. So, Alex, we've taken we've received over a thousand questions from shareholders. Obviously can't take them all. Are there any parting wisdom or parting thoughts that you want to offer about the business to our shareholders?
spk00: You know, it's really tough times out there, really tough for a lot of businesses. It's a lot of things are going wrong in the world, in our world. You know, the obvious danger, the lack of legitimacy of a lot of our institutions. And I can tell you why while You know, at Palantir, we are very, very focused on our business, and bad times are very super motivational for us. And when we get to good times, we'll be even stronger. And, you know, we're a little bit of a, like, wacky group of guerrilla warfighters, but we're very much in fighting mode. And not just for us and the West, but also for our shareholders. And, yeah, hope to talk to you soon.
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