Palantir also reported. uh, they, they were profitable in the quarter and that's because of a big boost in other income which I thought was quite interesting, but uh, otherwise, they're actually growing quite well. Uh, they're at a 22 operating margin. They uh, they did come in a little bit soft on the guidance for 2023 2.205 billion versus the 2.28 expected.

Still though, free cash flow sitting at 75.8 mil in the fourth quarter. they're uh, they're coming in with an expectation of Uh revenue of 508.6 versus 505 and rev. uh, you know? Okay, let's take a look here at uh, a brief just a brief moment here into uh, their investor relation sheet Commercial Revenue actually growing more than government rent Revenue growing. It's actually one of the big things that you want to see.

Continue at Palantir, you get a little bit more transparency with that commercial Revenue than you do that government revenue. Uh, and you can see here that overall company Revenue growth about 17.5 percent margin slightly weaker on cost of Revenue, but basically stable compared to 2021 coming in at 20.5 percent. and they did have a loss from operations, but they had that boost there of about 44 mil from other income. However, this is now getting a lot of folks excited that Penalty Are now officially will no longer be deemed profitless Tech and instead could be deemed profitable of attack, which has a lot of people very, very excited.

Uh, Palantir has obviously been something that's been heavily covered, especially on social media. And so the fact that now, uh, you've you've gone to a positive net income compared to a very long period of losses it has folks very, very excited. Now, something that we can do quickly is just try to understand the valuation. Usually, we do stuff like this on a daily basis.

In fact, we actually go substantially deeper into fundamental analysis in the course member live streams. Remember, we've got the flash sale going on linked down below. It is a 69 off a flash sale for Valentine's Day at Valentine's Day. But anyway, coming in at Uh, an expected an expected 19 cents of earnings for 2023 and a stock that is currently in pre-market up 18.

At Nine dollars, you're looking at a stock that currently is trading for about 47 times. It's uh, its earnings sitting at about a twenty percent growth on a revenue which is not how you're supposed to calculate Peg but that would put you closer to about two and a half times. Peg If that were to translate directly to EPS, you'd be about two and a half times. Peg.

However, if we expect that growth to be somewhere around, it looks like wall Street's thinking about closer to 24 25. you're actually sitting at closer to about 1.9 times PEG ratio. So as long as they stay profitable, it's actually not too horrible uh, of a multiple. So that gives us a little bit of intel on Palantir.

So congrats to those of you, uh, investing in that pound here and looking at for Palantir, Let's say other important things obviously to pay attention to for Palantir is, hey, what? what? How sustainable is some of this other income? Do we even need it on the basis of projections to keep going? uh and uh, to just stay profitable going forward? You can also jump over and look at their assets. You've got assets right now sitting here. Look at this. cash folks.

2.6 billion dollars of cash sitting around at Palantir I Mean that's phenomenal That that already gives you plenty of buffer. But that you know talking buffer implies that you're actually spending cash, right? Well, we can go to the cash flow statement I Love me some cash flows. And even though they had an operating loss, their net cash provided by operating activities because of the software. As a service business, a business that basically takes eighty percent of their revenue to gross, uh, profit, which is really, really incredible.

What you end up having is you have net cash provided by operating activities here of around 223 million dollars. So you've got this company pound here that's actually printing cash from operations. Really, really good. Uh, in fact, the reason you have close to a loss is because the stock based comp for the year ended in 2022.

Here was 564 million dollars That obviously comes off of the share. Uh, or it's basically shared dilution. So if you're in an investor in the shares, it dilutes you. But it doesn't actually affect the cash position of the company.

So why companies love that? If you look at free cash flow for the year, you can just subtract PPE Here that's plant property and Equipment you've got over 180 million dollars of cash flow for the year of 2022, Which really, absolutely incredible. And the expectation is that cash flow is going to continue. So really, you have the opportunity here to increase your cash without taking on more debt. Uh, I Don't actually let me see, let's see how much debt they actually have.

We got some payables and current liabilities here. Quick math: that's about 210 mil. I'm not going to count deferred, rev or cost deposits or lease liabilities. So you've really only got about 210 million dollars in current liabilities here.

If we look at non-occurrent liabilities, you've got maybe another 12 million dollars. Holy smokes, the capitalization structure of this company is actually extremely good. I Mean you're looking at under 100 and what 30 120 ish call it? Look, call it less than 150 million dollars of actual current liabilities that aren't like customer deposits or deferred revenue. Uh, you've got cash, just straight up cash sitting around of almost 2.6 billion dollars.

Uh, on top of that, you got some marketables over here. Who cares? So call it 2.6 billion dollars of cash in the bank? Ola Uh, versus uh, maybe only about 140 million dollars of current liabilities Like bills to pay. Holy smokes, this is really well capitalized. I Mean you have 18.5 times as much cash as you actually have current expenses.

and I Think the big reason here for that is is the company is basically paying everyone in Stockholm Uh, it's phenomenal how much money they spend in in stock comp. I Mean look at this. Their sales and marketing expenses are sitting at about 700 bill here total up Opex For a moment with me, go down this journey with me, look at total Opex You're sitting at 1.65 million dollars for uh, the year end 2022, right? We'll go over now to stock based comp for the year end. You're looking at 30 percent of all of their operating expenses just going straight out of the shares rather than cash and that's letting them build up this cash.

War Chest, which does you know, doesn't really matter what they do, as long as you believe in the leadership. uh there? Uh, you know you would expect that cash could be deployed well, especially in the SAS Biz And really, you know a lot of companies that have this much cash. What they end up doing is they end up blowing it all on uh, sales and marketing. In other words, they just can't help themselves.

So they spend everything on sales and marketing to prop everything up uh, as as extremely as they can uh, during the good times. and that could be really dangerous because then they don't have any cash saved up for the bad times. But look at this company. this.

this is almost all you really need to know to see that this company is actually and I'm not invested in this company. But it actually goes to show you they're being very conservative here. They grew their sale, sales, and marketing expenses at just 17 percent. Whereas uh, look at that.

their revenue grew at 17.5 percent, you grew Revenue more than you grew sales marketing. That's a number one criteria right here. This is great. This would be concerning if the company here plowed all of a sudden.

You know, 50 to 100 sales and marketing growth into sales and marketing. it only grew Revenue at 17.5 right? But the fact that they're roughly matched here is phenomenal. And then look at this. they actually cut spending on research and Dev and GNA showing they're working on their operating leverage, they're operating efficiency.

I Said look, you know what this is. This is pretty impressive I Have to say, you know prop props to Palantir here. Uh, this is a very, very impressive statement. I Mean, even if you take out their other income uh, of this 44 million dollars of uh, question mark money over here, even if you take this out, Uh, 17.8 million dollars of a loss for a company that has 2.6 in the bank? That's a joke.

In other words, it's really, really, good. You can't poop on this company, especially not with nearly an 80 gross margin over here and operating leverage that's actually increasing. This is this is a very impressive report. I Mean this is a company that, honestly, it deserves to be up 18.

maybe even more because uh, wow, congratulations. That's all I can say for Palantir That's great. Now what we might do when the course member livestream is: go through the earnings call and get a little bit more color in terms of what the executive staff is thinking for the company. Uh, going forward and uh, how uh, how much are we growing that commercial side of the business? I'm a big fan of seeing growth in the commercial side of the business for Palantir.

Uh, they've also obviously got the buzzword of AI but it's more than just a buzzword for Palantir. Really, with Palantir, you actually do have, uh, the basis of what they do the software they provide is artificial intelligence. I Mean it's your really? Originally it's been considered your government version of snowflake. Obviously, they're different, but they've got similarities in that.

Let's give you a lot of data and you start making connections. whether that's on, uh, you know, uh, their Gotham business. uh uh for for Public Safety and public security. But think about just the idea about police forces.

Uh, it's also kind of scary police forces, for example, loading just all of their big data in and then getting reports back that say things like hey, you know the AI thinks we might need an officer on 32nd and Broad today and then all of a sudden they prevent crime because the AI suggests hey, we might need someone here because crime is statistically increasingly likely to happen in this particular area Today It's phenomenal and I'm just scratching the surface of really what this kind of software can do. Uh, honestly, my explanation is is like oversimplified. It's like a five-year-old example of of what this stuff can do. but now multiply that by the entire government.

the CIA the FBI police forces across the United States Kind of scary what the stuff can do, but it's also really incredible from a logistics point of view. what these folks can do for commercial Enterprises uh, shipping Logistics I Mean there, it's it's scary. But uh, you know, then again, we're going into a big data in world of AI So and somehow they figured out how to make it wildly profitable with a whole lot. a whole lot of cashola.

So look, even though I'm not in it I Have to say, this looks pretty sexy and foreign.