Palantir’s share price was up today on news that the firm has posted its first-ever annual profit. In its fourth-quarter earnings call, the data analytics firm reported that its revenue had increased by 20% to $608.4m, up from $508.6m last year. This growth, said the firm, could be attributed to record demand for AI services in the US, with its commercial revenue in the country growing by 70% annually. Markets greeted the results warmly, with Palantir shares up by 20% in after-hours trading.
“Our results reflect both the strength of our software and the surging demand that we are seeing across industries and sectors for artificial intelligence platforms, including large language models, that are capable of integrating with the tangle of existing technical infrastructure that organisations have been constructing for years,” said chief executive Alex Karp in a letter to shareholders. “After nearly two decades of investment, we have positioned ourselves as a fundamentally new software business, and our results reflect this ongoing transformation.”
Palantir share price up thanks to AI, says CEO Karp
Karp added that 2023 was Palantir’s first-ever profitable year since its founding in 2003, a source of controversy (among others) for the firm known primarily for the provision of analytics platforms to the UK and US governments. Following a record reported profit of $209.8m last year, the business gave higher-than-expected profit guidance for 2024 between $834m and $850m yesterday.
Much of the firm’s growth in 2023 was attributed to the rollout of its Artificial Intelligence Platform (AIP). Karp commented that Palantir took on 600 pilots using the platform in 2023, up from 100 the previous year. “Every part of our organisation is focused on the rollout of our Artificial Intelligence Platform (AIP), which has gone from a prototype to a product in months, and our momentum with AIP is now significantly contributing to new revenue and new customers,” said Karp.
A year of NHS controversy
The analytics firm also doubled down on a profitable relationship it has struck with the UK’s National Health Service. Late last year it was announced that Palantir would be a leading contractor to build the Federated Data Platform (FDP), a project designed to pool patient data scattered across 42 NHS care systems into a single database. Advocates of the scheme argued that the FDP would afford the NHS greater insights into population health, as well as help it push down waiting lists and better allocate resources internally.
Several campaign groups have argued, however, that NHS England had paid that little attention to the appropriateness of using Palantir to help build the FDP – the firm’s founder had previously attributed public support in the UK for the health service to “Stockholm Syndrome” – or on educating the public on how their personal data would be used in the project. Under current data regulations, individuals are permitted to opt out of their personal data being processed by the NHS for secondary use cases, which could prevent the FDP from living up to its potential as a tool to assess population health or influence internal resource allocation.
“In the past, some people have registered type one and national data opt-outs as a way to demonstrate their lack of trust in how a specific programme or initiative is handling their confidential data,” argued the UK’s national data guardian, Dr Nicola Byrne, in August. “If opt-out rates now rise considerably further, it would be to the serious detriment of health research and planning nationally.”