Palantir nearly doubled revenue, but its new contract signings grew just 6%

Palantir's third quarter looked like a clean sweep on the surface. Revenue for the three months to September 30 came in at $2.313 billion, up 96% from a year earlier and about $149 million above the top of the company's own August forecast. U.S. commercial sales of $984 million overtook U.S. government sales of $953 million for the first time. Management raised its full-year revenue outlook for the third time in 2026, to roughly $8.53 billion, which would be about 91% growth.

The stock did not celebrate. Shares had already slid 3.1% in regular trading on November 2 before the release, then whipsawed after hours across a range of roughly $172 to $188. Part of that is a valuation that leaves little margin: market data cited by XTB put Palantir's forward earnings multiple above 100. But the more interesting signal is in the numbers Palantir itself now asks investors to watch, and they are slowing much faster than revenue.

Bookings stopped keeping pace

As Trefis pointed out in September, Palantir's second-quarter report quietly left out the company-wide customer count, leaving bookings — total contract value, or TCV, the lifetime value of deals signed in a quarter — as the growth number in the spotlight. In Q2 that number was spectacular: U.S. commercial TCV of $2.13 billion, up 153%. The third quarter was a different story. Palantir closed $2.918 billion of TCV, up 6% year over year, CFO Dave Glazer said on the call, and StockTitan's breakdown of the results release puts that against $3.373 billion in Q2, a sequential drop of about 13%. U.S. commercial TCV was $1.463 billion, up 11% from a year earlier and roughly 31% below the prior quarter. (One broker summary, from XTB, reported TCV growth of 86% and U.S. commercial TCV growth of 116%; those rates match neither the CFO's stated figures nor the prior-year comparisons in other accounts of the release.)

A crude book-to-bill ratio, calculated from the reported TCV and revenue figures, makes the shift plain. A year ago, Palantir signed roughly $2.33 of new contract value for every dollar of revenue it recognized. In Q2 2026 that was about $1.75. This quarter it was about $1.26. Deal counts slipped too: 212 deals of at least $1 million versus 220 in Q2, and 64 of at least $10 million versus 73. Remaining deal value in U.S. commercial — contract value not yet recognized as revenue — reached $6.517 billion, 79% higher than a year earlier but just 4% above the June-quarter level.

There are benign readings. Quarterly TCV is lumpy, and a single large government award can swing it. On the earnings call, Glazer said several eight-figure deals signed in the quarter were shorter in duration than usual, and Karp framed the pattern as starting with a shorter contract and then expanding it. Shorter terms carry less lifetime value at signing, so some of the slowdown may reflect contract structure rather than demand. Trailing-twelve-month U.S. commercial TCV, which smooths out the lumps, was $6.114 billion, still up 62%. None of that suggests the business is in trouble. What it does suggest is that the multi-year pipeline is expanding at well under half the rate of current revenue, and that this year's revenue surge is leaning more on contracts signed earlier than on fresh ones.

Bigger accounts, not many more of them

Palantir reported 686 U.S. commercial customers, up 29% from a year earlier and 5% from Q2. Set against 148% growth in U.S. commercial revenue, that means revenue per U.S. commercial customer roughly doubled in twelve months. Expansion inside existing accounts is the classic sign of a product that sticks, and it is the land-and-expand pattern Karp described on the call. But it also concentrates risk. Trefis, which flagged that the company retired its total customer count without announcement, argued that if the U.S. commercial customer count flattens while spending per account keeps climbing, depth starts to look like dependence on a small set of relationships.

International remains the soft spot. International commercial revenue was $184 million, up 21% year over year and 1% from the prior quarter — a near-standstill. International government revenue grew 31% to $192 million. Asked about Europe on the call, CEO Alex Karp said that for now the company should "kind of avoid talking about it." The Next Web pointed to Germany's military evaluating 30 AI tools, with a prototype due in 2027, as an example of the sovereign-procurement contests Palantir has to win abroad.

Margins are real, adjustments still matter

Profitability is the strongest part of the report and the hardest to argue with. GAAP operating income was $1.085 billion, a 47% margin, and GAAP net income was $1.128 billion, more than double the $476 million of a year ago. Operating cash flow was $1.205 billion, and the company ended September with $10.4 billion in cash and Treasuries. Those are GAAP and cash figures, not just management's preferred adjustments.

Still, the headline 62% adjusted operating margin and the 158% "Rule of 40" score both exclude stock-based compensation, which was $318.9 million in the quarter, or about 13.8% of revenue. That is the bulk of the 15-point gap between adjusted and GAAP operating margin. Adjusted expenses rose 53% year over year to $887 million, slower than revenue, which is why margins expanded — but it also means Palantir is spending heavily to sustain growth even as signings cool. The Rule of 40 tells you nothing about what the stock price already assumes.

What the guidance actually implies

The fourth-quarter revenue forecast of $2.649 billion to $2.653 billion beat the roughly $2.46 billion analysts had expected, according to XTB's consensus comparison. But the midpoint implies about 15% sequential growth, down from 20% in Q3, and full-year growth of 91% sits below this quarter's 96%. Deceleration from near-100% growth is not a crisis. It is, however, the direction that matters for a stock priced on the assumption that hyper-growth lasts.

Karp told CNBC that he doesn't believe anyone has had results this consistent "in the history of software AI, ever," as quoted by The Next Web. The revenue line backs him up. The question investors appear to be asking is whether the next year looks like this one, and the forward-looking evidence Palantir supplies — bookings growing 6%, remaining deal value up 4% in a quarter, a U.S. commercial customer count up 5% sequentially, near-flat international commercial sales — points to a business still growing very fast, but with less of next year already locked in than the headlines suggest. Watch Q4 TCV: if it rebounds, this quarter was lumpiness; if not, the slowdown has started.