Palantir Technologies delivered the most explosive quarterly earnings report of the AI software cycle to date on Monday, August 4, reporting second-quarter 2026 revenue of $1.94 billion — a 92.8% surge year-over-year that trounced the $1.80 billion Wall Street consensus and extended the company's nine-consecutive-quarter streak of beating earnings estimates. Adjusted EPS of $0.41 beat the $0.28 forecast by 46.4%. Shares surged up to 29% in Monday's session and the stock continued to trade with elevated momentum through the week as the buy-side absorbed the magnitude of the result.
The standout growth engine was U.S. commercial revenue, which exploded 149% year-over-year to $764 million — a figure that, when compounded, represents 380% growth since 2024 and signals that Palantir's AI Platform is now a mainstream enterprise software purchase rather than a niche government contractor product. U.S. government revenue grew 90% year-over-year to $809 million, driven by expanding deployment of AI decision-support systems across defense and intelligence agencies. Total U.S. revenue reached $1.57 billion, a 115% increase, and now represents over 81% of the company's total revenue.
Contract momentum was equally staggering. Palantir closed $3.37 billion in total contract value during Q2, up 49% year-over-year, including a record $2.13 billion in U.S. commercial contract value alone. U.S. commercial remaining deal value more than doubled year-over-year to $6.24 billion — a leading indicator that the revenue growth rate should remain elevated for at least several additional quarters. The company's Rule of 40 score, a combined measure of growth rate and free cash flow margin, reached 155% in Q2, among the highest ever reported by a software company at scale.
CEO Alex Karp was characteristically emphatic on the earnings call and in media appearances. "This quarter was otherworldly," he wrote in the shareholder letter. "Demand for AI sovereignty has now been unleashed." In a CNBC interview, Karp stated the momentum "looks like this is going to go on for at least another 18 months" and framed Palantir's sovereign AI framework — which allows enterprises and governments to run AI on their own infrastructure without sharing data with external model providers — as the defining competitive advantage of the next enterprise software cycle.
Full-year 2026 guidance was raised dramatically: revenue is now expected in the range of $8.150 billion to $8.158 billion, representing 82% year-over-year growth and a massive step up from the prior guidance of $7.65 billion to $7.66 billion. U.S. commercial revenue guidance was raised to in excess of $3.42 billion — at least 134% growth — from the prior target of $3.22 billion. Adjusted income from operations guidance was raised to $4.889 billion to $4.897 billion, and adjusted free cash flow guidance to $4.5 billion to $4.7 billion. Q3 guidance called for approximately $2.16 billion in revenue.
Management cautioned that expenses will ramp in Q3 due to seasonal hiring of technical talent and new product initiatives, and noted that adjusted gross margin was impacted by the strategic decision to absorb cloud hosting costs for a major government customer in order to accelerate deployment timelines. Palantir is expanding its application layer through a partnership with Nvidia, offering fine-tuned models on sovereign stacks that the company says outperform standard frontier models in enterprise-specific tasks.