A Deep Dive on $PLTR
Palantir build the digital infrastructure for data driven operations and decision making. $PLTR seeks to become the next industry default software. In this thread, I will go over the things that you need to know about $PLTR.
Let's get started!! 👇👇
Palantir build the digital infrastructure for data driven operations and decision making. $PLTR seeks to become the next industry default software. In this thread, I will go over the things that you need to know about $PLTR.
Let's get started!! 👇👇
Total Addressable Market
$PLTR in S1 estimates its total addressable market to be approximately 56 billion for commercial operations and 63 billion for government side, a total of 119 billion. Most businesses that use data are $PLTR's potential customers.
$PLTR in S1 estimates its total addressable market to be approximately 56 billion for commercial operations and 63 billion for government side, a total of 119 billion. Most businesses that use data are $PLTR's potential customers.
Problem
There has been more data than ever before. However, many organisations do not have an integrated data system to manage their data. Therefore, the data is there, but it cannot be effectively used.
There has been more data than ever before. However, many organisations do not have an integrated data system to manage their data. Therefore, the data is there, but it cannot be effectively used.
Solution
$PLTR provides an integrated operating system to help organisations to easily aggregate and manage their data. $PLTR allows people to make data-based decisions while providing insights/potential solutions to the decisions making process.
$PLTR provides an integrated operating system to help organisations to easily aggregate and manage their data. $PLTR allows people to make data-based decisions while providing insights/potential solutions to the decisions making process.
Tailwind
$PLTR is riding the waive of big data. There has been more data than ever. Data is the new oil and $PLTR have the potential to be the new shovel.
$PLTR is riding the waive of big data. There has been more data than ever. Data is the new oil and $PLTR have the potential to be the new shovel.
Management
Alex Karp, $PLTR's CEO and Co-founder, is a sharp and colourful human being. Alex has a strong heart and ambition to make the best data software to protect US and its allies. Peter Thiel, a co-founder $PYPL, is also a co-founder of $PLTR.
Alex Karp, $PLTR's CEO and Co-founder, is a sharp and colourful human being. Alex has a strong heart and ambition to make the best data software to protect US and its allies. Peter Thiel, a co-founder $PYPL, is also a co-founder of $PLTR.
Glass Door Scores
Alex receives a 4.2 on Glass Door. Although not a very strong score, but still very solid. Most of the complains have been made against long hours of work whereas positives comes from the smart people and interesting problems you work with at $PLTR.
Alex receives a 4.2 on Glass Door. Although not a very strong score, but still very solid. Most of the complains have been made against long hours of work whereas positives comes from the smart people and interesting problems you work with at $PLTR.
Products - Gotham
$PLTR offers two main software platforms; Gotham and Foundry. Gotham is $PLTR's data operating system for governments to drive global decision making.
$PLTR offers two main software platforms; Gotham and Foundry. Gotham is $PLTR's data operating system for governments to drive global decision making.
Gotham was built for analysts at defense and intelligence agencies and first offered in 2008. Gotham was designed to protect the US and its allies, who share western liberal culture.
Gotham collects near real time data from millions of sensor, e.g. cars, drones, fighter jets, satellites, operated by thousands of users, and combine it into a single operating system. Gotham also uses AI to suggest actionable plans off real time, for better decision making.
The US airforce, Space force, Navy, Army all uses Gotham. All these indicates the US government's trust on $PLTR, as many life and death decisions are made on Gotham. Gotham is also used in emergencies, such as Covid, by the CDC and the UK department of Health.
Foundry
$PLTR Foundry is the commercial version of Gotham, which aims to become the data operating system for the modern enterprise. Foundry integrates billions of rows data across different sources, and allow decision maker to make data-driven decisions.
$PLTR Foundry is the commercial version of Gotham, which aims to become the data operating system for the modern enterprise. Foundry integrates billions of rows data across different sources, and allow decision maker to make data-driven decisions.
Foundry builds a 'digital twin' for organisations. A digital twin allows organisations to run online simulation when they want to implement a new change. The digital twin allows companies to ask what if and analyse the impact of one change to the entire business.
In other words, Foundry aggregates data from scattered sources, allows decision maker to make data based decisions, provide recommendations to optimise the business, and reveal consequences of each decision. Foundry provides organisation with a decision and data advantage.
Customisation & day 1 value
Foundry provides 'day 1 value' by offering out of the box tools. Foundry can be implemented within days if not hours. Institution can choose the specific Foundry modules that serve its needs. Foundry can be easily configured.
Foundry provides 'day 1 value' by offering out of the box tools. Foundry can be implemented within days if not hours. Institution can choose the specific Foundry modules that serve its needs. Foundry can be easily configured.
Without Code
Both Gotham and Foundry allows people who cannot code to make decisions based off data via visualisation. This is appealing as many today may not be able to code.
Both Gotham and Foundry allows people who cannot code to make decisions based off data via visualisation. This is appealing as many today may not be able to code.
Identifiable outcomes
Not like some SaaS companies, Foundry can generate measurable outcomes, making the decision to use Foundry much easier. For example, a global bank with Foundry is able to access customer information for compliance 90% faster than before.
Not like some SaaS companies, Foundry can generate measurable outcomes, making the decision to use Foundry much easier. For example, a global bank with Foundry is able to access customer information for compliance 90% faster than before.
Military Grade Security
Security is always $PLTR first priority. $PLTR has repeatedly turned down opportunities to sell, collect, or mine data. $PLTR is accredited with some of the most stringent standards, including FedRamp, IL5, and more.
Security is always $PLTR first priority. $PLTR has repeatedly turned down opportunities to sell, collect, or mine data. $PLTR is accredited with some of the most stringent standards, including FedRamp, IL5, and more.
Head Start
Alex Karp has repetitively said that $PLTR has started 5 years before others attempt to create something similar to $PLTR. This creates a huge gap between $PLTR and others, making their close to no competition (except individual company's attempt to build its system).
Alex Karp has repetitively said that $PLTR has started 5 years before others attempt to create something similar to $PLTR. This creates a huge gap between $PLTR and others, making their close to no competition (except individual company's attempt to build its system).
Foundry for builders
Foundry has been primarily used by large institutions. However, $PLTR recently has launched Foundry for builders, which dedicates to support start ups by providing them Foundry. This indicates to $PLTR optionality toward SMEs and even individuals in future.
Foundry has been primarily used by large institutions. However, $PLTR recently has launched Foundry for builders, which dedicates to support start ups by providing them Foundry. This indicates to $PLTR optionality toward SMEs and even individuals in future.
Optionality
$PLTR are currently in areas such as AI and ML (Machine learning), anti money laundering, auto racing, data protection, defense, energy and many more. This indicates that $PLTR has optionality, applicable to almost any field.
$PLTR are currently in areas such as AI and ML (Machine learning), anti money laundering, auto racing, data protection, defense, energy and many more. This indicates that $PLTR has optionality, applicable to almost any field.
Apollo
Apollo is $PLTR's third platform, which acts as the underlying layer/infrastructure to both Gotham and Foundry.
Apollo is $PLTR's third platform, which acts as the underlying layer/infrastructure to both Gotham and Foundry.
Most SaaS companies offers their services only through public cloud, but Apollo allows $PLTR to go where no SaaS has gone before. Apollo makes it possible to run Foundry/Gotham on drones, subs, satellites, classified networks, on-premises and disconnected operations.
Apollo automates deployment of Foundry/Gotham for set ups and makes maintenance and updates much faster. Apollo also makes these support processes cheaper as everything is streamlined, without the need of dedicating tech staff.
Apollo functions as a brain that automates the back end. As Foundry and Gotham is both made up of hundreds of individual services, the upgrade process can be tedious. But, with Apollo, it decides what to upgrade, when to do it, and how.
All these mean that Apollo allows $PLTR to offer their platforms to a wider audience, while being able to retain SaaS economics, without losing the efficiencies and scalability of a centrally managed SaaS solution.
Edge AI
Palantir Edge AI is $PLTR's newest effort. Palantir Edge AI allows AI to be run on disconnected & remote endpoints across edge devices. Palantir Edge AI enables autonomous decisions to be made on micro models with real-time sensor data.
Palantir Edge AI is $PLTR's newest effort. Palantir Edge AI allows AI to be run on disconnected & remote endpoints across edge devices. Palantir Edge AI enables autonomous decisions to be made on micro models with real-time sensor data.
Edge AI allows customers to operationalise AI at scale and deploy to the edge with ease. Edge AI brings AI to drones, vehicles, buildings, oil rigs, aircraft, ships, wind turbines, robots, satellites — and more.
In other words, traditionally, after sensors collect data, data will be transmitted back to a centralised AI model for decision making. Edge AI removes the middle layer, and allows AI to be run where the real time data is collected, via a decentralised micro model.
Financials
$PLTR Q2 revenue grew 49% YoY to 376 million, total deal value increased 63% to 3.4 billion, and contract value booked grew 175%. $PLTR usually has its weakest quarter in Q1 and Q2, which signifies $PLTR's Q2 strong growth.
$PLTR Q2 revenue grew 49% YoY to 376 million, total deal value increased 63% to 3.4 billion, and contract value booked grew 175%. $PLTR usually has its weakest quarter in Q1 and Q2, which signifies $PLTR's Q2 strong growth.
Customer Growth
$PLTR total commercial customers grew 32% quarter over quarter (not year over year!) and Q2 commercial customer count increased 61% since the end of last year. This is particularly important when we take into account $PLTR customer onboarding strategy.
$PLTR total commercial customers grew 32% quarter over quarter (not year over year!) and Q2 commercial customer count increased 61% since the end of last year. This is particularly important when we take into account $PLTR customer onboarding strategy.
$PLTR onboard customers in three phases. Acquire, expand and scale. During the acquire phase, $PLTR offers their platform for free for customers to explore $PLTR. $PLTR will figure the customer's needs during the expand phase, making the software more tailored.
During the scale phase is where $PLTR makes most of its margins and revenue. Customer in the scale phase have a contribution margin of 63%. This means that when many of these new customers move into the scale phase, revenue will skyrocket for $PLTR.
Revenue per customer
Not only is revenue growing strong, $PLTR is also able to earn more revenue from each customers. Average revenue per customer (excluding new) was 8.8 million, up 9% from Q1. Average revenue for top 20 customers grew from 36 to 39 million QoQ in Q2 2021
Not only is revenue growing strong, $PLTR is also able to earn more revenue from each customers. Average revenue per customer (excluding new) was 8.8 million, up 9% from Q1. Average revenue for top 20 customers grew from 36 to 39 million QoQ in Q2 2021
This is very positive, as it indicates to $PLTR's pricing power. $PLTR can earn more of their 'subscriptions' as they add more services into Gotham/Foundry and create more value for their customers. Customers seem willing to pay too.
Revenue Breakdown
Government revenue grew 66% YoY in Q2, as $PLTR signed new deals with the US Army, Air Force, Coast Guard, HHS, and CDC. Governments remain to be a bigger customer for $PLTR (61%) vs commercial (39%).
Government revenue grew 66% YoY in Q2, as $PLTR signed new deals with the US Army, Air Force, Coast Guard, HHS, and CDC. Governments remain to be a bigger customer for $PLTR (61%) vs commercial (39%).
In comparison, $PLTR Foundry & commercial side is still in its infancy, as commercial rev grew 28%. However, US commercial revenue growth rate accelerated to 90%. The continue growth of the commercial side of business will be key to $PLTR's future success.
International exposure
$PLTR generated 56% from US customers and 44% from customers abroad. $PLTR should have a bright future in the Western world (US allies), but would not be operating in nations that do not aline with Western liberal culture capping some international limit.
$PLTR generated 56% from US customers and 44% from customers abroad. $PLTR should have a bright future in the Western world (US allies), but would not be operating in nations that do not aline with Western liberal culture capping some international limit.
Margins
$PLTR's adjusted gross margin is at around 82%, proving that $PLTR is a SaaS company rather than a consulting business. $PLTR also has an adjusted operating margins above 30%.
$PLTR's adjusted gross margin is at around 82%, proving that $PLTR is a SaaS company rather than a consulting business. $PLTR also has an adjusted operating margins above 30%.
Stock Based Compensation
$PLTR stock based comp is high indicated below. However, I am more so of the opinion that $PLTR needs the best talent, and you need to pay talent well. Therefore, as long as the revenue is growing, I would not be too concern with stock based comp.
$PLTR stock based comp is high indicated below. However, I am more so of the opinion that $PLTR needs the best talent, and you need to pay talent well. Therefore, as long as the revenue is growing, I would not be too concern with stock based comp.
Long Term Outlook
$PLTR's management has continue to guide a revenue growth of 30%+ for this year and the next four years. This indicates to $PLTR's confidence of its bright future ahead.
$PLTR's management has continue to guide a revenue growth of 30%+ for this year and the next four years. This indicates to $PLTR's confidence of its bright future ahead.
Valuation
$PLTR currently has a market cap of ~50 billion. $PLTR is trading at an EV/Revenue of 28.58x and P/S ratio of 38.02. This is a rich valuation to say the least, and many potential may be priced in already.
$PLTR currently has a market cap of ~50 billion. $PLTR is trading at an EV/Revenue of 28.58x and P/S ratio of 38.02. This is a rich valuation to say the least, and many potential may be priced in already.
Risks - Blackbox
The main risk to retail investors is that people do not really know or intend to know the $PLTR platforms well. Although research and (hopefully reading this thread) does help, it can still be hard without hands on experience.
The main risk to retail investors is that people do not really know or intend to know the $PLTR platforms well. Although research and (hopefully reading this thread) does help, it can still be hard without hands on experience.
Nevertheless, I believe we can assess the strength of $PLTR's software by looking at the contract & customer growth, as these growths are the result of the strength of $PLTR's software platforms.
Execution
Foundry is still starting up. $PLTR will need to continue to execute and scale their products efficiently and cost-effectively. $PLTR would need to expand their effort in 'pre-sale education' to increase potential customers (at least in the short run).
Foundry is still starting up. $PLTR will need to continue to execute and scale their products efficiently and cost-effectively. $PLTR would need to expand their effort in 'pre-sale education' to increase potential customers (at least in the short run).
Institution's willingness
Institutions may be stubborn and unwilling to onboard $PLTR. As $PLTR is expensive, many institutions may try to create their own data systems before turning to $PLTR. $PLTR's growth may be constrained by the ambition of these institutions.
Institutions may be stubborn and unwilling to onboard $PLTR. As $PLTR is expensive, many institutions may try to create their own data systems before turning to $PLTR. $PLTR's growth may be constrained by the ambition of these institutions.
Scalability
Although there is Apollo, it still takes time and effort for $PLTR to scale and implement their platform (in particular, if we take into account the acquire, expand and scale, sale cycle) There are also no guarantee that these customers will move from acquire to scale
Although there is Apollo, it still takes time and effort for $PLTR to scale and implement their platform (in particular, if we take into account the acquire, expand and scale, sale cycle) There are also no guarantee that these customers will move from acquire to scale
$PLTR will need to continue to accelerate this process to onboard more customers.
Valuation
At a rich valuation, the market demands a lot from $PLTR. If $PLTR cannot deliver their guidance of 30%+ or even higher revenue growth, $PLTR will likely plummet (at least in the near term).
At a rich valuation, the market demands a lot from $PLTR. If $PLTR cannot deliver their guidance of 30%+ or even higher revenue growth, $PLTR will likely plummet (at least in the near term).
Competition
Although $PLTR currently does not have many 'direct' competitors, more competitors will enter into this field. (Imagine if $GOOG tries to enter this field?) I still think $PLTR is going to win btw, because the race is for $PLTR to lose, not for others to win.
Although $PLTR currently does not have many 'direct' competitors, more competitors will enter into this field. (Imagine if $GOOG tries to enter this field?) I still think $PLTR is going to win btw, because the race is for $PLTR to lose, not for others to win.
Next Step...
In my opinion, for $PLTR to truly be a generational company, $PLTR will need to scale to SMEs (good sign with Foundry for builders) and even individuals.
In my opinion, for $PLTR to truly be a generational company, $PLTR will need to scale to SMEs (good sign with Foundry for builders) and even individuals.
How $PLTR can offer a compelling product at a competitive price point for most SMEs and individuals will determine the ceiling for $PLTR.
Bull Case
$PLTR has the possibility to become the 'default' IT software that every company use. If $PLTR becomes so good at handling data and providing enormous value for decision making, institutions that do not use $PLTR will be behind the competition from the get go.
$PLTR has the possibility to become the 'default' IT software that every company use. If $PLTR becomes so good at handling data and providing enormous value for decision making, institutions that do not use $PLTR will be behind the competition from the get go.
Bear Case
If $PLTR does not execute well, and create the best in class product, other competitors will come in and take market share. $PLTR would then not be a 'one of its kind' company, and will likely become just another SaaS company.
If $PLTR does not execute well, and create the best in class product, other competitors will come in and take market share. $PLTR would then not be a 'one of its kind' company, and will likely become just another SaaS company.
Conclusion
I knew almost nothing before researching about $PLTR. After my research, I must say that I am impressed by the work that $PLTR is doing and I buy into what they are aiming for.
I knew almost nothing before researching about $PLTR. After my research, I must say that I am impressed by the work that $PLTR is doing and I buy into what they are aiming for.
$PLTR is truly a very exciting company. Data is the new oil, and $PLTR has the chance to become the default 'shovel'. Although, there are still many things left to be proven, if executed well, $PLTR has an opportunity to become the next generational company.
END// Thank you for reading this thread. I hope you have learnt one thing or two about $PLTR. I want to say a BIG THANK YOU to @Mayhem4Markets and @InvestiAnalyst, for their time in sharing their expertise and thoughts on $PLTR to me. Be sure to follow them if you haven't!
If you have enjoyed this thread, I will really appreciate if you can LIKE and RETWEET! It really means a lot to me and your support always motivates me further! Please follow me @JoshuaTai0427, if you want more future analysis like this. Have a great day and may God bless you!
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I would really appreciate your thoughts! Thank you!
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