By Heather Somerville
Palantir Technologies reported another quarter of record revenue on Monday, reflecting strong demand for its artificial-intelligence technology from the U.S. government and commercial businesses, even as its role in aiding the Trump administration's deportation agenda has come under tougher scrutiny.
The data-analytics company based in Denver said it had $1.41 billion in sales for the final three months of last year, a year-over-year gain of 70%.
The company posted net income of $609 million -- another quarterly record. Profit and revenue each came in ahead of analyst expectations.
Palantir stock rose more than 7% in after-hours trading before tapering off slightly. Shares have declined about 12% since the start of 2026, extending a rout that began late last year amid a slide in software stocks. Even after the decline, the company's market capitalization of about $350 billion makes it one of the more expensive stocks on the S&P 500 index.
Shares are up more than 75% in the past year.
No other company currently in the S&P 500 has hit as high a valuation on as little sales as Palantir did, according to a November Wall Street Journal analysis of inflation-adjusted FactSet market data going back to 1984.
Palantir, which sells software to centralize, manage and analyze large amounts of data, has been riding the broader AI buzz to ever-higher earnings. The company's cachet in Washington has helped it gain more large government contracts, including last month a $448 million contract with the Navy to provide better data for nuclear-submarine maintenance and upgrades.
"The U.S. Department of War is going all-in on Palantir for its mission-critical data analytics platforms," analyst Louie DiPalma with William Blair wrote in a note on Monday.
But criticism over Palantir's work with Immigration and Customs Enforcement in the past year from current and former employees and elected officials has cast a shadow over the company's stock-market run. ICE has contracts with Palantir to use its technology in applications to find and track immigrants the agency is targeting for removal from the U.S.
"We have lots of debates internally about what we should do, how we should do it. But from the beginning we have stuck to our very strong values of expanding what we believe is the noble side of the West," Chief Executive Alex Karp said on an earnings call Monday.
The criticism has reached a crescendo since the beginning of the immigration crackdown in Minneapolis last month that left two U.S. citizens dead. In public statements, Palantir has stood by its work for ICE.
Palantir said revenue last quarter from U.S. government contracts was $570 million, rising 66% from the same quarter the previous year. Sales to U.S. commercial customers were $507 million, more than double from a year earlier. Both beat analyst expectations. The company said it has 954 customers.
Its total government revenue, which includes contracts won outside the U.S., was $730 million, beating analyst expectations.
Palantir reported full-year revenue of $4.475 billion, beating earlier guidance of $4.396 billion to $4.400 billion.
The company said it expects revenue for 2026 to be between $7.182 billion and $7.198 billion.
Palantir signed its largest-ever U.K. defense contract this month with the Ministry of Defense, a roughly $328 million award to support Britain's military operational decision-making over three years. The contract is a signal that Palantir has overcome at least some of the resistance it faced from U.K. lawmakers, a number of whom have voiced concerns about data privacy and the company's close ties to U.S. intelligence agencies.
Write to Heather Somerville at heather.somerville@wsj.com
(END) Dow Jones Newswires
February 02, 2026 18:23 ET (23:23 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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