Financial, cultural, legal, technical: why are they escaping to the metaverse or faculty lounge jargon or political structures that are clearly not solving problems where inputs and outputs are totally cor anti if at all correlated um uh? Why is it that we are unable to see the violence? Uh that is occurring as truly something that will be part of our ongoing future and not as episodic um. Why do we describe these things as uncertainty when they are certain and are happening? Why is it that our institutions are not even pretended pretending that they will be able to hold the center while simultaneously pretending the center will coagulate to a center independent of new structures, new ways of doing things of new new new products, new institutions, new ideas, um Part of that is, um is uh. You know we have theology theological structures around how we build, for example, in our space products, and that theology presupposes that the world will be stable, so specialized things we built for both commercial and uh, for example, special forces things that are powering current events now were Built over the last two decades, precisely because, if you are in the periphery, doing the most sensitive important work in the world as uh, you need to be able to interact with your software in a way where it's disconnected in the reconnects simple problem. Normal software sucks.

At it, you need a very specialized product. We've been supplying this to the world's most important elite soldiers for nearly a decade under the context of what we call nexus peering. You need an ability to interact with space where you solve certain problems involving compute and involving the reduction of data using a colloquially defined ai tuned by foundry. Getting that to the soldier.

You need to be able to, in the context of commercial entities, rebuild the supply chain, because there's war, there's obviously going to be food storages, there's disruptions. You can no longer get certain resources from countries you can. You have to get them from others overnight. The systems literally presuppose that will never happen and therefore fall completely apart.

When it does happen, there is no plan for when it doesn't happen. This is why you know, even though we've been a completely focused product company, what that is only focused on building these products. We have new products coming and and not as focused on actually convincing people that we're right they still sell and because the other products are not built for this world, you have a financial context. Just like we have raging inflation uh.

We are very likely to see this war increase. The risk of a nuclear event is so much higher than it's being presented in the public world that it's almost uh he's right by the way for real to watch the coverage uh and yet you know, there's really. No idea of what you would do with uh evaluating the quality of revenue, so that you know parent here, for example, we are accompanied to thrive in in good times and we thrive in bad times. We are not built in the way the theologians of our financial institutions would love us to be built so that you're built you know exactly like.

If we had listened to them, we would only be growth and no free cash flow. We're a company that throws off free cash flow where a company that expected inflation. We obviously super committed to the mission, but was obvious, thus even at inception and bad times. The quality of government revenues would be crucial because other revenues would be would suffer from inflation.

They would have a lower quality, they'd be less sticky. We built these products for the right reasons and we're not ashamed to say that we're winning, maybe because we were right, we didn't want to be right, but you, but but some of this stuff was so obvious. It was obvious that these institutions, the theology of how we model these things in every context, is just corrosive. So you end up with the wrong products the wrong quality of revenue, so you have growth without free cash flow or free cash flow.

Without growth, you have products that work now that can be hyped up with sales, but clearly are not going to work the day after tomorrow, no ability to build new products. Why would you build new products? You're going to have this perfectly tinkered model, get get the institutions to invest in you and acquire all these companies that actually build product yeah, but it's nearly impossible to build products for tomorrow. There aren't companies to acquire. You actually have to do it yourself, sure here and there you can look for things to accelerate.

Palantir has done that, so we you know you have to. We. We at palantir are not fleeing to a different world, whether it's the meta world or a theological world or financial version of theological world uh or a uh. A grad school version of the theological world which isn't even actually academic because academic person presupposes interacting with the object from a theoretical perspective, differentiated from the object, not importing a theological preconceived version of an object onto the theory and reimporting that onto the object products.

Don't work like that reality doesn't work like that talent. Here we are. We are playing a critical, crucial and much bigger role than we're allowed to mention, or whatever discuss in public in current events, obviously commercially, because our partners and other future partners are being disrupted. Their supply chains are disrupted, there's, there's a threat of a disruption in the broader economy and the and and may, and we are and then many realize that the the reality of a truly monumental epic, uh and horrific disruption in the form of a nuclear attack is Much higher than is being reported, but also in the commercial in the government context where we are playing an outsized role and uh and we're very proud of that and we're proud of the people.

We're able to support and uh and um and we're also um eager to continue to help to support them, must also say the people who've watching this. Many of whom share our belief that the future is to be won by people who accept the reality of what it is and not what it ought to be, that you can only change the art by accepting. What is that you've stuck with us and our? I hope will stick with us and we are going to continue supplying the world's most important products to the most interesting, creative and effectual people in the world and continue to thrive as this hybrid company. That is both bull and barren, comes into full stride.

In both environments, but in absolutely anomalous stride when times are rough and people are hiding, palantirs products are on the absolute front line and you see them in the news every day and we would love someday to discuss exactly what we're doing. But we are playing a good role in your support and and buying into the world as it is, is enormously important to us. Thank you. In q1, revenue grew 31 percent commercial revenue grew 54, accelerating for the fifth quarter in a row.

Us commercial revenue grew 136. Also accelerating for the fifth quarter in a row we added 40 new customers growing customer account 86 percent year over year we had gap operating margins of negative nine percent versus negative 33. A year ago, reflecting our continued march to gap, profitability they're getting more profitable. That's good margins of 26.

We have been building our company and our products for this world. The stability on which so many models that purported to explain the world rely. It's vanished. If it ever existed at all.

We have built a company for the world. That is not the world that ought to be, and it is instability, not its absence that makes our software all the more essential, as our customers confront an extraordinarily significant and rapidly escalating conflict in eastern europe, runaway inflation disrupted supply chains and a new wave of refugees. Our products have become more essential than ever at our last earnings call. The invasion of ukraine had not yet occurred from the moment those tanks rolled into ukraine.

We have been delivering our capabilities to the front. We have been continuously shipping innovation over the course of the conflict to provide western militaries the software that they need to fulfill their missions. Every product and capability has been employed by our customers from gaia, gotham edge, ai foundry, nexus, peering and more and the newest of them. Meta constellation continues to deliver value in making space-based collection, truly operational, delivering significant mission outcomes, and we have been working across poland, lithuania, the uk and other nations to power refugee relief operations.

Our software is powering the world food programs, ukraine response getting aid as far east as possible and across our commercial customers. We are powering resilience to a whole new set of supply chain shocks. Real world events are driving enormous and long-term opportunities for growth. We are on the front lines seeing what needs to exist, hearing from commanders and users and building now what is needed and what will power the next decade of u.s and allied defense programs.

We did this a decade ago in afghanistan with nexus peering. We did this a year ago with meta constellation whose impact writes headlines in the new york times, and we will continue building this offer of the future ramping our investment heavily across the business. In the face of these palencer shaped macro conditions. This focus has delivered tremendous depth in our r d and our full stack ip.

We now have this opportunity, in addition to releasing new products at pace, to bring an increasing amount of that innovation to market, and that's what you're, seeing with apollo, we believe apollo will fundamentally change how software is deployed, anticipating a future where multi-tenant sas is dead and Is clearly dying in the present a trend that is accelerated by geopolitical events, every software company will need to be able to deploy their software into their customers, environments requiring them to manage fleets of heterogeneous environments across public clouds on premises, sovereign clouds and growing data jurisdictional Boundaries and to do all that seamlessly apollo will take customers from a world of continuous deployment to autonomous deployment, and we have been pleased with the market reception to apollo in our demo day event really being received by a completely new buying audience. We are also now offering nexus peering as a stand-alone capability for customers to build their own data fabrics. On top of over a decade ago, we pioneered a technology that enabled the reason about the causality of a distributed system of many many different gotham nodes. These nodes could all have independent concurrent edits to the same objects and nexus peering meant that we could synchronize these edits across the network, either in real time, with consistent comms, as well as across unreliable intermittent and disconnected environments.

Nexus peering means that you have a distributed data fabric that is survivable and resilient. The loss of any number of nodes or facilities won't impact the whole. This is a core and fundamental hard technology breakthrough that has powered gotham's unique success across coalition information sharing for defense and intelligence agencies and by enabling nexus peering to be sold as a separate capability. We can enable every program in the department of defense to leverage this distributed, data synchronization and data fabric, as we further demonstrate our own commitment to dod's modular, open systems approach.

The greatest opportunity for foundry continues to be the application development infrastructure platform. We believe that foundry will become the place that you go to build the applications of the future with aws or azure, with their highly unopinionated collection of services. Most of the work remains in front of you to get to value, and all of that onus is on you, the customer, to get to that value with foundry you're 90 of the way there on day, one software-defined data, integration native multi-tenancy for your applications, the opis Version pipelines, applications artifacts, just name some of the components that make foundry work from the start. That's why u.s space forces, kobayashi maru software factory, realized their ambition.

Building 13 operationally accepted applications on top of foundry in months, while sun setting legacy hundred million dollar plus programs. That's why airbus rolled out an internally developed supply chain network control tower a suite built on top of foundry's application development infrastructure and in this set of applications it mitigates supply chain issues and is working towards saving hundreds of millions of euros annually by speeding up production Against existing fixed capacity and reducing inventory across all parts, what aws was in the last decade? Foundry will be in the next. Turning to the highlights in our commercial business we added 37 net new customers. In q1, we saw continued growth in automotive, in financial services and energy, including a new super major customer and in life sciences.

In april, we closed the renewal with a major u.s fortune 100 company for over 150 million dollars. This customer hosted a hackathon with over 600 participants featuring applications built in underwater. You got to figure out which company decisions, finance, build planning, network, resiliency and customer experience. The super major was excellent example of how scaled customers built better on palantir as application development infrastructure.

Last quarter, we saw continued interest in our modular offerings. Hospitals need to improve operational efficiencies surrounding patient flow and staffing processes in order to decrease the length of stay and ensure patients have access to proper care. Palatre's hospital operation suite has proven a unique ability to solve these problems through collaborative decision making, based on real-time data, with targeted, event-driven notifications and actionable ai pounders hospital operation. Suite is now used by hospitals covering over 37 000 beds across the u.s up from just over a thousand on january, 1st.

Turning to government as instability in the world increases, we continue to double down on our support of the missions of the west's most critical foundational institutions. Our ambition is to be the sixth prime contractor for the u.s federal government, a trusted partner to deliver complex, end-to-end, integrated hardware and software solutions, building on the legacy of programs that we prime today. But we seek to be the first company to do this. As a software prime, using software innovation and our unmatched expertise to deliver new integrated hardware software capabilities faster than the pace of conflict in q1, we launched our u.s federal advisory board, an important milestone in this journey.

The war is not just happening on the ground in ukraine, but also in space and accordingly, our opportunities in in the space universe continue to expand. U.S space force continues to deliver new operational capabilities to america's space guardians who have set the gold standard for allies. This is leading to substantial interest in u.s space forces warp core platform, which was built on foundry amongst allied nations at space. Symposium in colorado springs to an audience of u.s and allied governments, peter marquez, the former head of space policy at the national security council and the head of space policy at aws, presented project argus a new space situational awareness platform built on foundry.

We closed a 10 million pound enterprise expansion with the uk royal navy pounder software is used by the royal navy across a broad spectrum of areas from strategic workforce planning to supply chain management and world events have accelerated our opportunity in western and northern europe. In germany. We were awarded a framework agreement for state and federal government organizations to purchase gotham and foundry with an initial order coming from the bavarian police adding to our existing german security customers in north rhine, westphalia and hessia. Our government healthcare business grew with an expansion with the centers for disease control and prevention.

The growth of the work is reflected in the doubling of the run rate over the past year, while continuing to deliver on the cdc's foodborne pathogen program, which we have been powering since 2009. The cdc, expanded foundry's pathogen surveillance and response work and deployed generalized modules built on top of a common foundry ontology against new pathogens, including measles, mumps, legionella and noble flu. The cdc is also using foundry to process genetic sequence, data derived from wastewater samples. On the other side of the atlantic, our continued investments in software-defined data integration with our newest pipeline builder product continues to pay off at the nhs where they were able to roll out foundry to 38 hospitals.

Integrating hundreds of data sets in march alone to enable them to work through the national care backlog i'll turn it over to dave to take us through the financials alex and sean highlighted. We are uniquely positioned for unstable times. We work with some of the most crucial and important institutions in the world. The us government was 42 percent of our first quarter revenue and has been a leading driver of growth for eight years with a 30 kg from 2013 to 2021, which we view as a long-term trend.

More fundamentally, we believe supplying our products to the us government and her allies is a core pillar of our business, as alex mentioned in the face of substantial macroeconomic and geopolitical challenges and uncertainty. The quality of our revenue, as viewed through growth margin, performance and durability, and especially resilience is unique to palantir. As alex wrote in his letter, we combine the resilience of the defense industrial sector with the growth of a software company in the face of our customers challenges. We have and will continue to incur expenses prior to having contracts in the delivery of mission, critical capabilities.

Following these investments, we expect acceleration of our u.s government revenue into the second half of the year in q2. To date, we've already seen the re-acceleration of u.s government revenue and expect acceleration of the overall government segment to follow in the next quarter or shortly thereafter i'll now review our first quarter performance, followed by our outlook. First quarter, revenue grew 31 percent year over year. Ahead of a prior guidance to 446 million overall net dollar retention was 124 percent commercial revenue, growth accelerated for the fifth consecutive quarter.

First quarter: commercial revenue, increased 54 year-over-year to 205 million up from a 47 percent increase in the fourth quarter. Commercial growth continues to be driven by our u.s business as u.s commercial revenue, growth accelerated to 136 in the first quarter up from 132 in q4, international commercial revenue, growth accelerated in q1 to 24 year-over-year up from 22 in q4 and 7. A year ago, our u.s business revenue grew 38 versus the year ago period. Government revenue increased 16 versus the year ago period to 242 million.

Adjusted operating margin was 26 ahead of our prior guidance by roughly 300 basis points. Our customer acquisition continues to accelerate. We added 40 net new customers in the first quarter up from 34. In the fourth quarter, we had our strongest quarter of net commercial customer ads, adding 37 commercial net ads, which equals 25 sequential growth and 207 year-over-year growth.

We expect continued growth in commercial customer acquisition throughout the year. Our growth with existing customers remains strong, trailing 12-month revenue from our top 20 customers. Increased 24 year-over-year to nearly 45 million first quarter. Billings were 490 million up 35 percent year-over-year first quarter.

Acv closed increased 35 percent year-over-year on the back of 208 deals versus 81 deals in the year ago period. First quarter. Tcv closed was 248 million. The u.s government's businesses tcb has been impacted by the continuing resolution, but now that a new budget has been passed, we're already seeing q2 u.s government revenue re-accelerate.

Additionally, with the geopolitical landscape outlined by alex, we expect government bookings activity to increase for the remainder of the year, resulting in stronger government revenue growth. In the second half of 2022, we ended the first quarter with 3.5 billion in total remaining deal value up 26 percent year over year, while duration shortened 4. Over the same period, we ended the first quarter with 1.2 billion in remaining performance obligations up 86 year-over-year. As a reminder, rpo is primarily comprised of our commercial business, as it does not take into account contracts with an initial term of less than 12 months and contractual obligations that fall beyond termination for convenience clauses, both of which are common in our government, business margins and Expenses are on an adjusted basis, which excludes stock based compensation.

Adjusted gross margin, was 81 contribution, margin was 57 first quarter, adjusted income from operations, excluding stock-based compensation and related employer payroll taxes was 117 million, representing an adjusted operating margin of 26 percent. Ahead of our prior guidance of 23, first quarter, adjusted expenses were 329 million up 7 sequentially. We are spending to position the company and our customers to win the current geopolitical environment. These investments in product and our customers will continue over the balance of 2022..

First quarter, adjusted earnings per share were two cents which includes a negative two cent impact, driven primarily by unrealized losses on marketable securities, we generated 35 million, that's the specs and 30 million in adjusted free cash flow cash flows vary quarter to quarter, but it's worth noting The 66 million dollar increase in our accounts, receivable balance. At the end of q1, we had a very strong war, chest 2.3 billion in cash and no debt. In march, we expanded our revolving credit facility to 500 million up from 400 million previously, and our credit facility remains entirely undrawn. Our balance sheet leaves us ideally positioned to take advantage of the opportunities that may arise from further deterioration of global conditions.

Turning to our outlook, we are guiding to a base case of 470 million in revenue for q2 there's a wide range of potential upside above our guidance, including those driven by our role in responding to developing geopolitical events. We expect second quarter adjusted operating margin of 20. In the base case, as we accelerate investments to support our customers mission in advance of anticipated contract awards and continue to expect full year adjusted operating margin of 27, we expect and are already seeing an acceleration of our u.s government revenue resulting from these investments. Continuing to execute the guidance strategy set forth by our ceo, alex carp in our year-end 2020 earnings call with regard to long-term revenue guidance.

We are providing and will continue to provide guidance of 30 percent or greater revenue growth for this year and the next. Why? Iceland? What is that going to do? Dude? Iceland is awesome over to rodney to open up q. A thanks, dave joining me for q. A are sean sankar, dave, glazer and kevin kawasaki carp's, not answering questions kurdish p asks.

Are there any new products? Oh that's me. That's my question: yeah we have released so much new products. Pipeline builder has improved data integration, productivity, two to three acts at the nhs autonomous sales and operation planning and execution, the hospital operations suite meta, constellation edge, ai and edge stream and beyond new product. We are bringing to market 15 years of deep tech that we built to power gotham and foundry nexus.

Peering our distributed d-dill data fabric is going to power. The next decade of dod programs apollo is going to take our customers from continuous deployment to autonomous deployment, and this is what we're focused on everything else: financials performance, those are the kind of crazy. Your mic is a little bit loud, so try to adjust it. The software the world needs before the world knows it needs it.

The president arises from a deep love and respect for the institutions that are required for the world to function and a deep understanding of the macro geopolitical shifts that some might say are coming, but we would say, have already arrived and the practicality of our software arises From the deep love of our users to humans, who are at the coalface, who do the hard work day in and day out from the factory floors of detroit to the cold, concrete floors that refugees are sleeping on in warsaw? We build software for the world as it is today to help our customers and their humans manage to get to the world. That ought to be thanks. Sean dave. This next question is for you.

Daniel l asks what is palantir doing to reduce shared dilution. Thank you. Daniel this is actually something never been asked before misunderstood. If you take a look at last year, we only added four tenths of a percent in fully diluted shares outstanding in the entire year.

If you flip to the first quarter of this year, that fully diluted number actually declined for the quarter, so he literally ended q1 with fewer shares than when it started. This guy sounds angry. Thanks, dave sean. This next question is, for you, noah a asks, alex carp said bad times are good for palantir.

What is palantir doing during this time of war, inflation and hyper partisanship to back up carp's words, how is palantir solving the world's current greatest problems? Noah. This question is really important. The answer to it is literally palantir. It is the reason that we exist, as alex has mentioned many times.

We have been building our company and our products for this world, as our customers confront rapidly escalating conflict in eastern europe, runaway inflation disrupted supply chains and a new wave of refugees. Our products have become more essential than ever. I've already talked about how we are helping governments respond to russia's invasion and the resulting humanitarian disaster from meta-constellation and edge ai to powering refugee and relief operations. But it's also important to understand that a chain of events has been set in motion.

A rube goldberg light set of bangs boeings and ricochets that extend and will continue to extend into every facet of the world. Food is short and prices are exploding. The availability of fertilizer required to grow more food is disrupted. Commodity prices are skyrocketing, neon gas.

Nobody talks about fertilizer 46, palladium all disrupted all crucial in the semiconductor supply chain. Ukraine is a major regional center for clinical trials. All of those trials and the life-saving medicines behind them are now disrupted, simple, but essential. Automotive components like wiring, harnesses and seat belts are disrupted.

All of this is coming on the back of a set of dynamic disturbances from covid and the resulting supply and demand shocks. People are still coping with and the emergent wave of shocks that will come from extended and severe lockdowns in china to solve these problems. You cannot operate on software that was built to assume a stable world in the stable world. You can make plans and you edit it occasionally.

The plan is static. The assumptions are fixed and immutable in the real world in this world. You only make a plan, so you can change it. You need all of your data ontologized into your digital twin, flowing into dynamically deliberate applications that connect to each other.

You need your ai to move faster than the rate of disruption when something goes wrong. It needs to tell the person at the coalface what to do. Next, inflation flowing through your supply chain means you need an entirely different approach to manage suppliers, logistics, production and snop. Our work with tyson's foods is delivering 10 million dollars of value realization every week by moving them from legacy approaches like integrated business planning to autonomous sales and operations execution by moving from a static plan that was assumed to be right to autonomously planning.

Where you go. Turn by turn, as as they are dynamically updated to navigate around unforeseen obstacles, literally, every function of every business is breaking under the stress of these events. Events where the aftershocks are strong and more profound than the initial earthquake and foundry was built for this thanks sean dave. This next question is for you deepak c asks: when is the company targeting to be gaap profitable? Thank you.

Deepak. We had a negative 9 gap operating margin in q1, an improvement from negative 14 and q4 and from negative 33 percent in q1 2021. So we're making significant progress and q1 was our strongest gap quarter to date and not to mention last year for the full year. We posted 424 million in adjusted free cash flow with a 31 adjusted operating margin and we're already off to a strong start this year, but with that said, we're preparing for a world that has the highest chance of a nuclear war in my lifetime, let alone, since My parents are kids and, as alex discussed, the quality of our government revenue as viewed through growth margin, performance, durability and resilience is unique to palantir.

We think this uniqueness will be incredibly important in the quarters to come. Thanks dave kevin. This next question is for you, jackson, k asks. Can you comment on the spac partnership strategy and its impact on the financials sure, thanks jackson, you know revenue from these contracts has peaked in q1 at around 39 million and we will not have additional new customers from this program, as we've wound the program down going Forward expect about 30 million of revenue per quarter from these customers.

Revenue in q1 is higher as a result of some catch-up of about nine million recognized in the quarter reflecting work we started last year. We also saw roughly a negative two cent impact on earnings per share from the marketable securities. When you look at this by geography, you'll see continued strength and growth in the u.s business expats growing at 65 percent year-over-year and nine percent sequentially quarter over quarter. We had our strongest quarter for winning new commercial customers overall commercial customer count up 25 sequentially and up 207 from a year ago and in the united states commercial customer account grew 368 percent.

We expect continued growth in commercial customer acquisition and, as alec mentioned alex mentioned, we see a path to double our us commercial revenue. Again great thanks, kevin sean one more for you before we open up the call michael p asks in the fy 2021 business update. There was a reference to ops pi as a foundry capability or perhaps module. Could you elaborate on the problem that solves and what value it delivers to foundry users thanks michael when you think about foundry, there are really three high-level massively differentiated capabilities.

The first is that foundry makes the marginal cost of data integration approach zero. What with software-defined data integration with pipeline builder? With all this data integration technology? We have software that writes its own data pipelines for you, this gets you to the starting line quickly. It helps you answer the question: how am i going to bring all my data together? How long is that going to take and how i deal with the fact that there's new types of data created every single day? The second capability is that foundry makes the marginal cost of application development approach: zero, no code, wysiwyg application builders for robust, interconnected applications. Importantly, these are not dashboards.

These are applications that read and write to your existing enterprise. Transactional systems. Like your erp, your general ledger, your warehouse management system and third foundry has native modeling and simulation capability that lets. You interact the digital twin of your enterprise.

So, yes, you can compute something like an optimized production plan, but even much more importantly, you can respond to real world surprises in real time. The best analogy i have for this is that current technology is like most, people are using something like mapquest, where you put in a destination and then you print out the map. Foundry is like waze, where yeah you put in the destination, but we are dynamically computing. The best way to get there all the time turn by turn, based on the ever-changing facts on the ground: traffic construction accidents, road closures, while the competition is stuck in the traffic jam, you're racing across the finish line.

So all of this is possible because foundry is a digital twin of your business and that is powered by foundry's ontology, so with our ontology we're modeling, not just the nouns, but also the verbs of your business, the actions that you can take. So that means you cannot only realize that there's a problem with your production plan based on real-time data, but also compute the correct answer: the correct plan and push that transaction to your erp system, and all of that amazing capability has historically only been available for applications Built inside of boundary, the opi's they change. All of that the power of the ontology can now be used by any application in the enterprise, whether it's first party apps developed by it or third-party apps developed by its suppliers and independent software vendors. The opis are clean.

Syntactically sugary sets of restful apis, i like to think about it as serverless enterprise orchestration, it's lambda, but for your enterprise, simple abstractions, that make the authentic complexity of the real world, businesses, manageable and programmable thanks sean. Our next question comes from brent phil, with jeffries brent you'll receive a prompt to unmute your line and ask your question uh. Regarding the government business, can you talk to uh the acceleration uh that you're seeing in in the business, and i think you called up the united states as uh, where you're seeing the re-acceleration? Can you also speak to the rest of the world and what you're, seeing there? Absolutely thanks. Brent we've been working with the us government for 15 years and over the last decade, we've seen a 30 percent kagger, and that covers times of peace and times of conflict, and i've already talked about our involvement with current events and the role that we're that we're Playing there and you can you can kind of see the re-acceleration starting to happen with the winds that the work that we're doing with d6 cd2, which was literally built for a land war in europe? The expansion of the work that we have with the uk royal navy, the the framework agreement that we have in germany, with the with uh state and local police covering bavaria, north wind, west valley, hesha.

The work that we're doing in space with u.s spacecom and warp corps, but really the the knock on opportunities that creates for us with allies as they approach space, and so the end result of this is that in in q2, we've started to see the us government Business reaccelerate uh we're doing a substantial amount of work right now, where we are investing in our customers, and we expect that work to have both short-term but also longer-term, payoffs. We're doing work now that that matters and will likely be contracted, but we're also doing work that is defining the requirements for defense procurements over the decades to come. Here. Thanks john, our next question comes from brad zelnick, with deutsche bank brad.

You will receive a prompt to unmute your line and ask your question: i'm hoping that you can. I think you guys might have come out cut out on me, but i wanted to double click on the range of upside that you referred to in your q2 guidance. How much of that variability is coming from commercial versus government and how should we think about the variability and what it means for your 30 revenue and 27 margin guide for the full year? Uh. Thank you so in in this macro environment, we feel very well positioned for the full year and beyond.

You know our us government revenue represented 42 of our q1 revenue and a significant amount of this is in the defense space. Your commercial business has been outpacing. The government business accelerating in each of the last five quarters to a 54 growth rate in q1 and as sean just mentioned, you know in q2, we've already seen some re-acceleration uh in the u.s u.s government business, which we think is a long-term trend and expect acceleration Of the overall government segment, this quarter, or shortly after great thanks kevin. Our next question comes from mark cash with morningstar mark you'll receive a prompt on mutureline and ask your question shout out to the 3500 people in the chat right now.

Thank you for showing up mark you can go ahead. Mark is on sasha's stream. Our next question comes from rishi juluria, with rbc rishi. You can unmute your line and ask your question.

I really appreciate it. Maybe i just wanted to go a little bit more into understanding the the range of outcomes in in q2. You talked about, maybe where you can get a little bit more upside um. Can you walk us through through you know? Maybe a full set of assumptions there and, and more importantly, you know when, when there's a base case and you're hinting at a bull case, what what? What is a potential bear case that you would be thinking about in in q2, just given everything that you're seeing going on from a macro perspective? Thank you look.

The base case is really establishing how we're thinking about um. The visibility that we have the upside is is quite large. I mean a lot of this comes down to contract timing and the acceleration of events. Uh, there's a fair amount of work, that's in flight here or the way that we engage with customers.

Is we're not going to deprive you of help in in your moments of greatest need when you're at war? Because paperwork isn't in yet, and so we think that we have visibility into the upside, we're going to comment on the specifics of it, but it's meaningful um, but it's also hard to predict and what we need to be focused on right now is just delivering. Not only because of what implies for this quarter the next quarter in this full year, but what it implies for the long term, growth of the business and the relevance we have to solving the most important problems in the world. Great thanks sean that concludes q. A on today's call i'll turn the call back over to sean sanchar for closing remarks.

Thank you, rodney. Look. We feed our culture every day through the direct exposure that we have to our mission from the factory floors of european manufacturers to the cold, concrete floors that so many refugees are sleeping on in q1, many of our people had the chance to go to poland, romania And lithuania to stand up to software infrastructure, to power refugee operations, processing nearly 100 000 people a day, and we are involved in supporting the military as they execute their sacred duty. Much as we positioned the entire company around covet and delivered outsized impact to global health agencies and health delivery or organizations as we stabilize production and supply chains now we will throw our entire company behind the most significant set of geopolitical and macroeconomic situations in generations.

Our company was built for this. Our software was built for this back to work all right, i think. That's it it's over yeah. I guess it's over.

We got some stuff. The mics on our end, i think, are a little bit weird. Let me lower my mind. I don't know, i think it's okay, i think it's okay yeah! Let us know in the chat if the audio is okay, because i think what happened is because the audio from the press conference was coming out a little bit lower, so everybody maxed it out, and then we were talking just blessed them like okay.

Let's talk about the performance, i'm going to pull up the highlights and then we can go through the individual numbers. Uh amit, you can start with your general thesis, which is now thesis, i'm just kidding. Obviously, there's a lot of the corner or we're just going to keep him there yeah. I can remove him, i mean there's a lot of emotions.

I get it there's. Obviously a lot of emotions in in the palate community right now and a lot of it is just the emotional overreaction which i understand, and but let's go through the numbers and let's be analytical about what we saw today and uh. Let me pull up the earnings summary, then we can go through the actual stuff right, yeah um, while you're pulling that up. I guess i'll get sort of my macro thoughts, which is what i said in the chat.

Yeah yeah open door beat revenue by 590 percent. Uh they they turned a profit for the first time in their history. I think it was. It was a couple hundred million dollars and i mean their stock.

You beat revenue by 590 what other asset classes doing that in the market outside of like some random crypto coins, uh and they're slowed down in the market. So i think you know for for a company to be able to grow 31 year-over-year. That is phenomenal for them to go 54 in terms of the commercial revenue year over year. That is also phenomenal.

Now are there some things that are not growing as much as we want, of course, but in the macro, what growth they've been able to show is pretty strong. To me, i mean and strong is relative, because very few companies are growing. You know much less. 15.

30 year-over-year, but the macro is not happy right. Now i mean bitcoin is down to 32 000, like the s. P is two dollars away from hitting the three hundreds for the first time in almost a year and a half since covet. So i think, unless pound tier was able to put up not only a tom brady type of quarter, but a tom brady versus the falcons down 25 to 3 type of quarter come back.

They were not going to get rewarded by the market and i think that's the thesis that everyone has to stay patient for here, uh, the crying in the chat, the sad, the emotional stuff. I think it's it's. It signals that very few people understand what investing is. It's not no, but it's understandable at the end of the day.

It's all about results right, so people put in money in the stock market because they want to take care of their kids, their pension, their future and it's the it's basically they're betting, their future on on certain companies and when it even virtual losses, they're very painful. Emotionally imagine like it's uh, it's your last money and now it's all of a sudden. You wake up down 15 down 60 percent of the past few months, so i understand the pain and i totally get it. I mean it's not pleasant for us to see it.

I think people think that we don't care at all. It's unpleasant. We don't enjoy seeing the downs, we just treat it very analytically and we look at it like i'll. Give you an example what i'm talking about and then i'll.

Let chris add his insights because i'm sure he has a lot to say so i'll show you what i'm looking at as a potential investor and we talked about it earlier. So i just scrolled down here, so i want you guys to see. So let me make it big what i'm looking at is i'm looking at it as what, if i'm buying the company right now and i'm a potential purchaser of palantir, the entire business. So i'm looking at this and i'm saying okay, so this company grew revenue year over year by 31, from 341 million to 446 million okay, so general and administrative expenses went down by 4 million, even though revenue grew by 31.

Research and development went down by 10 million, in fact, 10 down and sales and marketing went up by about 15, so the overall, the total operating expenses went up by two and a half percent from 381 to 391., so i just saw an increase of 31 in My revenues with an increase of two and a half percent on operating expenses. I can't stress how insanely efficient that is - and i know it's hard to see in the sea of red the stock price right now, but look under the hood and you're going to find something. I think which is i it's second to none. I mean it's really good efficiency, but hey chris, your thoughts yeah.

I totally agree with you. I think um. This is what you want to see in a company right where they're growing revenues, but keeping their operating expenses somewhat leveled over time, especially if you think about that growth rate, it's going to end up compounding into tons of free cash flow, which they can reinvest into. The business one of the mistakes that i think a lot of people tend to tend to make is they want to see that constant growth all the time and they there's always a layer of lumpiness that goes into some of the businesses that you work with like For me, whenever i i've always been critical of the government um side of the the business only because i know that there are so many other factors that go into it.

So an example is like geopolitics: how much of geopolitics is kind of playing into palantir growing? Only at 16 percent now versus growing at almost triple that less than a year ago, right how much of it is politics? How much of it is just a market cycle on on on how the government spends money. So one of the things that i, like i said very, very critical about palantir when it comes to the government side, is that it's always going to show up a little weird when it comes to this. The other thing is, i hope everyone remembers. Palantir only started working more heavily with the european union this quarter, so if you're looking at maybe future contracts and that goodwill that's going to come around from this ukraine situation, that's not going to show up at least for another two three quarters, if not next year, When all these european countries are finally going to say hey, you know what maybe we were wrong about palantir? Maybe we should have got more integrated with them.

This whole conflict is providing palantir kind of like a baseboard to get into the doors that are necessary to grow its government business outside of the united states. You cannot just rely on one government to support you, especially if you're relying on the defense sector right. You want to be as broad as possible. Imagine right now: you're building um like jets right, but only one country yeah, the biggest country, the u.s is using them.

What happens? Well, guess what now you're going to be kind of limited based on your customer uh customer who can buy your stuff and you're kind of stuck in this political nonsense where, if you have a party come in that can be bought? Trust me right now. There's politicians that are being bought and sold by the defense sector. I i i've said that a bunch of times and yesterday when i was watching the youtube video with um doug phillippone when he was actually talking to the guy, who did a podcast with he said. Yeah, like it was so hard for palantir to even get into the government business, because the politicians did not, you know who were actually being bought and sold by.

I hate to say, is lockheed raytheon and other general dynamics. They've basically created these bills to lock palantir out. What's one thing that we've seen in the last year and a half two years, that's changed dramatically. Well, you can see that now the democrats are in charge of the uh.

What do you call it senate, the um house and now the presidency, so if you're you're, if you're telling me that that party is not anti-peter, teal, look at look at how many times they've actually called out palantir's name in the in congress. Right if you're telling me that some of that military spending is not coming to palantir, because you know, because just a growth slow down, no there's, definitely some political angles to it, and peter thiel. That's one of the reasons why he's actually been supporting some of the other um like senate races and even house races, because you want people who are going to advocate for your company in in the us government. You know so right now.

I think there is a case to be made to say look the next couple of years until we see a dramatic change in government policy, we're probably not going to see that incremental government revenue that we're used to and then maybe once let's say, if you know The republicans come back in you're, going to see a lot more things come towards uh come towards palantir, but that that's just me, um being a little bit conspiratorial. But but i see the i i definitely agree with. The government slowdown is dragging the rest of the business down, but i hope people now focus on the commercial side more because from a commercial revenue growth like in the us of almost 140 somewhat percent. That means that pallentiers value proposition, if they can maintain that level of growth into the future, which i think is possible um - will just exponentially grow.

I i hope people realize this is one of the reasons why, when such in last year, well not last year like early in the year, was like oh i'm gon na go all in. I was like man, i that's that's good, but this is why i dca right now the market is down, i'm just thinking to my head man. This is great. This month, this quarter, i'm gon na have more shares.

Yeah, i'm gon na have more shares. I'm gon na average down even more so i think, if you're trying to if you're, trying to run a marathon, you you kind of want to pace yourself right. You don't want to just go all in at one time and and and that's the mistake that i made really early in my career, where i had such a bullish case on one company and i just bought a crap ton of it and then, when things go, Were going down, i would feel like crap and i would sell out too quickly now with dcaa. It's it's not a it's, not even a thought.

For me, sorry, i think i rambled not a problem shout out to the 4 000 people in the chat, wow, strong man, personal finance and our own friend of the show. Also, a friend of the show john lennon, not the singer, the discord god as well as a friend of the show, a strong man, i think, he's still the toilet. So if you're, just in the toilet, let us know strong man. Let us know in the chat, if you'd like me and strongman to debate he wanted me to come on epic debate dude.

I love that guy man. We need to get him a t-shirt. Bro, a palantir t-shirt, i'm going to get him one dab one of my favorite creators yeah. So i want to show you guys something else, so i want to talk about two things to get your opinion number one.

If i want to show you just how strong this company is because, again, i'm looking at it like an investor, what would a due diligence look like if i'm looking at this company, not the specific to the stock, and i get the pain i get. Everybody's frustrated and sad and annoyed and and anxious i totally understand this, but i want you to look at the business, so we just look at the efficiencies as far as the operating a margin. I want you to look at this thing, so the company is currently in position of over 2.2 billion dollars of cash. It has zero dollars debt.

So in times of high inflation, that's textbook you go to no debt high cash. Also, look at the structure of the balance sheet here and they're sitting on 3.3 billion of assets without any goodwill or nonsense like this. These are real dollars. All of these assets are monetizable.

If you think about it, some little bit faster, somewhat slower, so 2.2 billion cash 3.3 in real assets and their liabilities are 954 million. So they have more than three times assets of reliabilities and net of debt of 2.2 billion, which means they're as inflation-ready as a company can be. It shows a lot of strength. It doesn't show weakness to me when i look at this balance sheet and obviously the other thing i want to point out, and it's kind of just a macro thought to me, and i made alluded to this earlier - is that obviously look i think the quarter on Its own, if you look at the numbers, it's a good quarter, it's not! I wouldn't call it brilliant.

It's a good quarter. The outlook which we're going to talk about in a second isn't brilliant, but i think they're doing this on purpose. It's not the first time they have been sandbagging future outlook for beats. I mean guys.

I know it's frustrating, but look at the interhour market who's up right now, which company is up. Everything is down which company had earnings, it didn't go down. I mean it's more of a macro effect and i would hold on a second i'll finish in the second i mean i would stipulate to the fact that volunteers seems to be more sensitive to macro than let's say chevron, but i mean any growth stock in tech. Would behave similarly, i would just urge you to look at the underlying fundamentals of the company and not focus too much on the stock price as tempting as it may be yeah.

My question was going to be based upon everything. We're seeing in the chat is if you did buy a 21 22 22 24. What is your um psychological way as someone who's been in the market for a while to deal with the fact that you bought it at such a high price and like, like the the fomo of oh man? If i just held my 20 000 for five months and then got it at eight dollars, how do you walk yourself through that mindset when you see the stock price tank, it's a good question and uh chris. If you want, you can take it after me, i'll just do a quick one minute.

You need to remember that. The main reason why we're seeing this behavior in this in the stock of palantir is because we're currently entering into a bear market, so we're already in bear. Let me just explain the definition of the bear market. There's no like official legal definition, but the standard definition of a bear market is 20 now, so the nasdaq is already 23 down off the top, which was six months ago in december.

The s p 500 is headed exactly there right now. So it's going to join the nasdaq real soon, so we're entering into bear market territory and the entire stock market is going to go down. So i urge you to remember whether you're, young or old, whether you're, trying to get rich or you're just trying to maintain your capital just remember what is the time frame of a bear market. So, over the past 140 years we had about 20 bear markets and the average length of a bear market, which means from peak to trough, which means from the highest to the lowest point, is on average 10 months and we're six months into this, which means that Even if this continues the length - let's say this kind of the - i would call it the rule of thumb for a bear market is about a year.

The good thing about bear markets. They tend to last shorter than bull markets in general. So that's the one thing you have to remember: you just have to weather the storm. Imagine you're in the ufc fight and there's 20 seconds to go and you're on the ground and khabib is trying to pound you with their fist.

You know there's 20 seconds left of the round, so you don't want to tap at this point and the other thing is you have to remember that if you just zoom out and look at the nasdaq, the s p500 you're going to see something very, very interesting. You're going to find out that, despite these little pullbacks that we have sometimes they can take even the year year and a half the market in general goes up. So, even if you're close to retirement, let's say that you're in your 50s or even in your late 50s, you still have 30 years of retirement left, it's not like when you retire. You have to sell volunteer if you just have a long enough horizon in the stock and if the stock isn't garbage, i mean if the company is in garbage, then it will beat this bear market.

So the only question you need to be asking yourself: is this a good company right and nothing else so because the market the market will come around, the bad companies will be annihilated and the good companies will come out on top like it happened in the tech Bubble in 2000 and the subprime mortgage in 2007. - that's all i got to say about it and before i sign off just a shout out to the 20 donation for dano mit poop, i'm hoping that's not something like a buck naked. When i say it and it sounds stupid, but for 20 i'll do it definitely in this market go ahead. Chris, your thoughts yeah, i would say if we look at like the tech bubble right.

This is essentially the tech bubble. 2.0. With a with a few caveats. Um when we had the original tech tech bubble, everyone was just piling into the companies like you could put something.com, and everyone was throwing money at it.

This time around. It's more of a you know: valuation bubble where everyone was like excited about data science and all this other stuff, and they all started throwing money at it. You look at any ai cloud company you put ai and cloud in your name and boom.