Thread by @cameroniadeluca

1/ Palantir Technologies - $PLTR

I overlooked this company for far too long! Join me for a [THREAD] about the business and my bull case. This is quite long so buckle up!

Since its IPO on 9/30/2020, Palantir rocketed close to 200%.

Now up about 150% trading around $25.

👇👇

2/ Overview

Palantir was founded in 2003 after the 9/11 tragedy to aid in the fight against terrorism.

Its software stack is offered to clients to help solve problems through formulating patterns that are embedded deep in mass amounts of differently structured data/data silos.

3/ Overview

This data is securely analyzed and interpreted within the Palantir software. Unlike other software platforms, Palantir notes it only allows employee access to the data specific to their need. They cannot look into what they're not supposed to see.

4/ Management

Led by co-founders Alex Karp (CEO) and Stephen Cohen (President).

Also founded by Peter Thiel, co-founder of PayPal $PYPL.

5/ Management

In the early 2000s, PayPal was seeing massive amounts of cyberfraud. Classic algorithmic approach was not working. Algorithms could not iterate on-demand to adaptive opponents.

You need a human mind to apply these algorithms to data. Boom, $PLTR.

6/ Platforms

This is crucial when you operate with more than half of your business in the public sector. Threats are coming to gov't from all over at a nonstop rate. But it is not just cybersecurity.

Its two platforms are listed below:
- Gotham
- Foundry

7/ Gotham

Gotham was created in 2008 for customers in the intelligence sector

- ~54% of total revenue
- Est market size of $63B

It enables users to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants.

8/ Gotham

Ex: Gotham to investigate potential threats and to help protect soldiers from improvised explosive devices during war.

Here are a few groups who use Gotham:
- US Dept. of Justice
- US Dept. of Defense
- US Intelligence Community
- US Army Research Lab

9/ Gotham

A quick note that is extremely interesting - it is said that Palantir Gotham was the driving force behind finding and locating Osama Bin Laden.

🤯

10/ Foundry

Foundry was created in 2016 to address a common set of challenges that at large companies.

- ~46% of revenue
- Est market size of $56B

"Foundry is becoming a central operating system not only for individual institutions but also for entire industries."

11/ Foundry

"Over the long term, we believe that every large institution in the markets we serve is a potential partner."

Ex: 2017 p/ship with Airbus expanded into a platform for the aviation industry, and today connects data from >100 airlines and 9K aircraft around the world.

12/ Foundry

Here are a few customers who use Foundry:
- Airbus
- BP
- Fiat Chrysler

13/ Business Model

1. Acquire: S-T free pilot programs to drive future rev growth

2. Expand: Understand principal challenges faced by customers

3. Scale: Customers now self-suff, develop software and apps on top of PLTR, cont to provide help via operations and maintenance

14/ Thesis + Opportunity

It is pretty obvious there is a need for this product. The governmental contracts alone tell you how important this product can be to an organization and how sticky it is.

At first, Alex Karp was hesitant to hire a sales department.

15/ Cont'd

Once he saw the market opportunity on the commercial side Alex and the team decided to add to their sales team to source new clients and it has paid off.

16/ Cont'd

Originally an engineering only team, the business spread by word of mouth. This enabled the $PLTR team to dedicate all of their work to iterating their software to create an untouchable product.

Alex says the goal is to develop software 10 years ahead of others.

17/ Cont'd

This is working, but I think he has realized the true opportunity for growth is in the commercial contracts side.

In Jan of 2021, Alex said in an interview the vision of $PLTR has always been to make the west, especially America the strongest in the world.

18/ Cont'd

If that is truly the goal, strengthening commercial businesses and creating the most valuable companies in the world right here in the US should be a goal. And it is, along with providing best-in-class service to the gov't.

19/ Cont'd

Currently, their top 20 customers make up 61% of revenues, but on a YoY basis, customer concentration is decreasing.

Also, rev from new cust acquired in first 3 months has skyrocketed showing the acquire, expand, and scale model is working.

20/ Conclusion

Palantir has a massive opportunity to provide its software stack to thousands of customers. Equally as important, Palantir can be seen as a consulting company/service by providing one-off services on either the gov't or the commercial side.

This goes unnoticed.

21/ Conclusion

I could keep throwing these IP slides at you but I won't.

Here they are: s26.q4cdn.com/381064750/file…

I suggest watching this video of Alex Karp. He is a brilliant visionary.

22/ Conclusion

This company checks all the boxes for me:

Founder-led✅
Visionary mgmt✅
Sticky product✅
Great rev growth✅
Large, untapped TAM✅

I am long shares and will continue to add over time.

Cheers