Palantir (PLTR) Q4 25 Earnings Review: Strong U.S. Growth, Stock Under Pressure

Palantir reported its Q4 25 after U.S. market close on February 2, delivering a solidly strong performance. The company posted adjusted EPS of $0.25 and total revenue of approximately $1.41 billion, both exceeding market expectations.

Management also raised the full-year guidance for Fy26 significantly, projecting revenue of $7.182–7.198 billion, representing YoY growth of over 60%. This demonstrates strong confidence in the company’s growth trajectory. Following the earnings release, the stock jumped nearly 8%.

However, in the current high-valuation environment for tech stocks, the market’s focus on Palantir has shifted from “will it grow?” to “is the growth sustainable?” Coupled with ongoing reputational pressures, traders remain cautious in interpreting the positive news.

U.S. Market Leads Growth, Driven by Government and Commercial Segments

Data shows that the U.S. business remains Palantir’s most core and predictable growth engine.

U.S. government revenue grew 66% YoY this quarter, supported by ongoing recognition from prior contracts and the December launch of the $448 million U.S. Navy ShipOS project.

These high-barrier, long-duration government contracts reinforce Palantir’s deep integration and reliability within U.S. government systems, partially mitigating market concerns over its high valuation.

The U.S. commercial segment also performed impressively, with revenue up 137% YoY, surpassing $1 billion in a single quarter for the first time. Growth was largely driven by partnerships with top consulting firms such as KPMG and Accenture. By embedding Palantir’s solutions into broader consulting offerings, the company can leverage client relationships for faster, scalable expansion.

Forward-Looking Metrics Strong, Customer Stickiness Rising

Palantir’s performance on forward-looking metrics is equally notable.

Total Contract Value (TCV) increased 137% YoY this quarter, with U.S. commercial orders growing 67.4%. Remaining Performance Obligations (RPO) rose 144% YoY, reflecting strong client commitment to long-term services.

Within software services, even without aggressive price increases, average deal size continued to rise, signaling deeper product adoption and expansion among existing customers. Billings were up 91% YoY, with contract liabilities increasing by roughly $80 million QoQ, further confirming strong subscription and prepayment demand.

Overall, Palantir is in an accelerated monetization phase, with both new client acquisition and expansion of existing accounts driving revenue growth.

International Business and Reputational Risks Weigh on Stock

Compared with the robust U.S. performance, Palantir’s international business continues to face structural constraints.

Government contracts in the U.K., the Middle East, and some other regions provide certain support, but the company’s deep integration with the U.S. defense ecosystem, along with its highly customized, security-focused product offerings, dampens European enterprise willingness to sign up. International commercial demand remains low and steady.

Additionally, the company’s ongoing collaboration with ICE (U.S. Immigration and Customs Enforcement) continues to generate reputational controversy. While difficult to quantify financially in the short term, these factors may limit market risk appetite and cap a rapid stock price recovery.

Overall, Palantir’s Q4 2025 results show the company is successfully balancing new client acquisition with expansion among existing clients, delivering resilient revenue growth.

While the stock faces near-term pressure from high valuation, subdued international demand, and reputational risks, traders can monitor contract disclosures and government order flow to identify tactical opportunities in a volatile market environment.