So Palantir is the next. Tesla I'm calling it right now. What I saw yesterday proved to me beyond a shadow of a doubt. this company is the next.

Tesla Now in this video, I'll show you exactly why I'll explain how, but that's going to be at the end of the video. For that, you'll have to wait before we get to that point. We have to do a few things first, which is to analyze the financials, analyze the results. We cannot get to the final conclusion without me showing you the actual numbers.

Now, as far as the numbers go, I Already did all the work for you I Read the presentation I Read the full quarterly filing which was just submitted this morning to the SEC we didn't have yesterday the full quarter leads I read them all and I just cut out the important pages I Took five pages from the presentation, eight pages from the qualities, and I'm just going to show the highlighted sections. We're not going to go through everything I did it for you so you don't have to read the whole goddamn thing. Now let's jump straight into it. But first thing first, if this is your first time here, don't forget that you don't have to click nothing.

You don't have to smash nothing. You have to subscribe or buy nothing. Just listen. My name is Tom Nash I Used to be a senior manager for Deloitte for over a decade.

I Used to analyze companies for a living now I'm here 100 for you on YouTube And let's get the show on the road. So the first thing I Want to show you here? This is the stuff I took from the presentation I only took the important pages and I've already highlighted the important segments. So let's go through these first and then we're gonna go through these. I also highlighted the actual full qualities.

But first things first. So second consecutive quarter of Gap net income profitability for the company, which is a huge milestone. There's no point in talking about it again, but if you take a look here, this is the gap operating profitability for the first time in history. Another record-breaking milestone for this company.

Cash from operations 187 million with a 36 margin. Absolutely impressive. The companies that's generating think about it. Generating almost 200 million in cash, sitting on three billion of cash has no debt I mean zero debt, three billion cash, and generating 200 million every quarter.

This is a very Tesla like smell. You see what I'm getting here. This smells a lot like Tesla It's different stage, different industry still has a long ways to go. This ain't Tesla in 2023, but it smells a lot like Tesla did in the beginning when everybody was hating on it.

Revenue growth was 18 up to 525 million if you do a TTM calculation. The pace right now for this company is over 2 billion dollars per year. Which is absolutely insane because when we were talking about the stock just a year ago, it used to be a billion now to 2 billion U.S commercial customer growth 50 year over year. Which is another point I Want to talk about there's good in this and it's also bad in this now.

Just a quick shout out to Palantir. They definitely leveraged the AI hype everybody's talking about Ai and they did talk about that as expected in the financials. I'm sure 30 40 was fluff just kind of to Hype up this AI thing. but their platform is AI based and everybody knows it.

They've shown a few studies here which you can go and check and verify for yourself, basically showing that this industry is basically being dominated by palantir, not anybody else and you know they have the research to back it up now. I'm not going to talk about that too much because I Want to talk about the numbers. a gap of stability. second consecutive quarter, you can see how the chart looks negative, negative, negative, and then they've stabilized the ship.

So finally, this is a Gap net profitable company. It seems to be the new standard for volunteering That's incredible. A gap operating profitability for the first time in history. You can see that right here: A U.S Business This is very important.

337 million dollars for the three months ended in March 23. So one quarter of U.S business generates 340 million for this company. Now you can hate on Palantir all you want. but if this company sells services at 340 million per quarter just in the United States Imagine what they can do when they actually roll out in rest of the world.

Absolutely insane. and U.S Commercial Revenue Growth was 26 U.S Government growth was 22. Their bread and butter is the US It's not the rest of the world yet. So I think that even though a lot of people are hating on them just showing U.S based geographical Revenue the kind of distribution.

but for them, that's the bread and butter. That's where they're targeting and for them, that's the success. I Used to think it's a little bit Shady but now I understand why they're showing this and Alex Harp talked about this and the Prince conference. He said guys, we're going for the best Market The best Market is the US for government contracts.

The best market for commercial software is the Us. We're going to take over that market first, then we're going to expand. Makes a lot of sense to me and they're definitely dominating in the US. Next up you have basically Global Revenue growth.

It's 20 on the government, 15 on the commercial. The one thing I have here which kind of troubles me a little bit: I Want to see faster commercial Revenue growth I mean I Want to see commercial Revenue growth. Uh, at a pace that's higher than the government growth because I think that the future is in the commercial sector and when I See them only going 15 versus 20 on the government side, it kind of makes me think that you know that that sales team isn't really doing its job properly. The commercial growth has to be faster than government growth.

That's the that's the new direction of the company, so that's the first Achilles heel that you can find in these financials. So far. Total Revenue Growth: 18 Absolutely impressive. This is very important Revenue per customers for the top 20 customers up 14.

So their top 20 customers are now paying 50 million dollars each on average and it's up 14. Now there's good in this and there's bad in this now. I'll show you what I mean if you multiply this number by 20 50 million dollars times 20, you're gonna get half of Palantir's revenues. So half of volunteers revenues are coming from their top 20 clients.

Now it's a good thing because it shows they have high ticket clients, but it also is a huge risk. It's called client concentration risk CCR not the band the actual risk. And that's a problem when your top 20 customers are basically generating half of your revenues. If you lose two customers, it's a lot of pain, so customer distribution has to be better for this company.

It's impressive that they can charge 50 million per client for the top clients, but I would be much more comfortable with 100 clients carrying that load for the half of the revenues the company, not 20. So client consideration is still a thing for Palantir, a customer account is getting better. You can see from 184 commercials to 280 total customer ground is up 41 from 277 to 391. But then again, just remember it's impressive.

It's great, But you know the top 20 clients are carrying loads. so these are small clients. But I get what they're doing here. They're accumulating clients eventually going to upsell them and you know it's a very long game.

and I get it. And it's impressive to grow a customer list by 41 year over year. But still, as long as those 20 clients are making half of your venues, that's a big problem. As far as risk management goes, a total contract value is up to 400 million in the quarter, which is incredible Billings are 25 percent.

This is what's been saying to me. in a single quarter. they close 64 deals that are worth at least a million dollars. So 64 million dollar deals in a single quarter? Absolutely insane.

22 of them were 5 million or more and eight of those deals were 10 million contracts. This sales team can improve, should improve, will improve. But even at this point, this is some really, really impressive stuff. Uh, 2.9 billion in cash? Absolutely insane.

Make sure that you understand that they've took a lot of this money and put it in. U.S Treasuries. Why not get free Four percent? And instead of just having it in the bank and getting nothing and no debt, they have a credit facility of a billion dollars which they haven't even used yet. You see that 950.

Android So that just in case. So they have access to four billion dollars and no debt. Um, absolutely insane. Um, so expectations going forward to be Gap profitable for the remainder of the year.

Every single quarter in 2023 will be Gap Net income Profitable. Absolutely insane. They've just guaranteed that and they're going at a pace of 2.2 billion dollars of revenues for the year. Absolutely incredible.

Great results. Um, cash flow from operating activities went up from 35 million to 187 million. So imagine within a year going from 35 to 190 million dollars in cash flow from operations. gross profit is absolutely insane.

Went from 350 to 417. Another Improvement income from operations for the first time. right? Here You can see it actually being positive, negative, negative, negative, Finally being positive. Absolutely great.

Now let's go to the meat and potatoes. Let's go through the actual quarterly filings because this is the part that I geek out about the most. I've deleted like 70 pages and we're just down to the main ones. I've kept just the important ones and I've highlighted everything for you so you don't have to actually waste time and read it yourself.

So the first thing I want to highlight here is total Card assets. So total current assets are 3.2 billion dollars, up from 3.04 billion dollars just at the end of December 2022 So Within three months, this comes an increased its total current assets by seven percent. Seven percent. Absolutely incredible.

As you can see right here, this is the breakdown of marketable Securities and cash and cash equivalents. They went from 2.6 cash to basically putting half and half and putting half in marketable Securities which is essentially treasuries. Why not get a free four percent? And now this is the crazy part. If you just increase your assets current assets by seven percent and you increase your total assets by six and a half percent.

you did it with zero dollars that there's no debt. But here's the actual important stuff here right now. after improving their total current assets and having zero debt, this is the reality of volunteer. I Wrote here: Al 400 What does this mean? That means they're assets to liabilities ratio is four hundred percent.

They have four times more assets than liabilities. It's very, very scarce to find. I I Challenge you to go and look for a company that has four times more assets and liabilities with zero debt and three billion dollars in the bank and another billion dollars in the credit facility which they've never used except Tesla Again, I have Tesla Tesla smell except Tesla It's really hard to find a company like that. It's really going to be hard I Challenge you to try and do that and comment below if you do.

And now let's go to the next page right here. This is also very important Revenue Grew 18 We just saw this. but the more interesting part is what happened to the cost. while Revenue grew by 18 and it's really easy to look at because it's in the actual presentation.

I Think what is being overlooked by a lot of analysts is what's going on with the cost structure of this company because I believe that the cost structure is even more impressive than the 18 growth in this economy Now A lot. Okay, so about the growth. Look, the company was guiding for higher growth a couple years ago. Yes, but the macroeconomics changed.

You have to take the revenue growth of Palantir in context in context with the economy. If the economy is in the toilet, if companies are laying off, if companies are talking about, they're saving costs, nobody's expending. The economy is shrinking. We're going into recession in that economy.

They did 20 of growth per year. Absolutely insane. So have to be in context. As far as: Revenue Growth 18 of this economy is Hell Impressive now.

gross profit is up 14 which is another impressive thing now. So you grew Revenue 18 you grew gross profit 14. Now your sales and marketing only grew 16 percent. but your r D is flat as you can see right here.

no extra r D expenses and less. They've decreased General and administrative by four percent. So just as an overall thing, if you take all this together Opex Five percent. You see this here: Operating expenses of Palantir went up five percent while revenues went up by 18.

Any company that grows revenues by 18 and grows operating expenses at the same time at five percent means scalable business that's growing like crazy. That means that their margins will get better every single quarter. Very, very impressive. And mainly this thing here is you see a double check mark this thing and for the first time, we're actually seeing net income.

No loss This quarter last year they lost 100 million. This quarter this year they just made 20 million in net income. Very very impressive. That turnaround really reminds me of Tesla Just ah, they're in the corner and nobody noticed until it was too late.

A lot of people got you know, became Tesla Haters because they were too late to the party and I I suspect a lot of people will become a Palantir haters because they will miss this party as well because they're still busy because of their ego. They cannot admit they were wrong about this company and that's okay. I Don't mind either way. Um, stock based compensation.

Another point of critique towards this company which was not mentioned in in the presentation. If you take a look at the presentation, you'll find that Stockbridgecomp isn't really in that. Um I Want to show you this thing so stock based computation is negative 23 negative 23 So that means from one quarter to an to assertion from last year's first quarter to this year's first quarter, the company actually decreased its stock based compensation by 23 now I know a lot of people are talking about this oh Stockbridge competition, etc etc. I Get it.

I Get it. it's still high at 100 million. but guys, they've just dropped this thing by 23 now I Want to show you something else which is super important here. This is a table which I want you to see.

Absolutely incredible. I'm gonna reduce the screen right here and I'm gonna pop something on the screen that will explain everything You need to know about stock based compensation with this company. So this is a chart by my good friend Emir M You can see his thing right here in the corner em013l on Twitter Go check him out. He made his charge chart which I initially by the way I thought this was a palantir chart because it looks like a palantir thing so I just tweeted it and he's like Yo dude I made this I was like oh I'm sorry I thought it's volunteer thing I didn't give you credit so now I'm giving credit as credit should be given and you know mistakes are definitely something to admit.

So Amir Am made his beautiful chart and it shows you the percentage of stock based compensation of palantir as a percentage of Revenue. So as you can see right here, um, we're absolutely going crazy right here: 62 percent in 2021, then in 2022, 33. now in 2023, 22. So we went from 60 to 20 as a percentage of Revenue within just two years.

Absolutely incredible. Incredible. Now I Do want to show you a few other things. We're not done with the presentation yet.

we're going to go back to the presentation. so for that, we're going to pop that back on the screen. Emir Thank you for that beautiful table! So stock based competition is down 23 and it's now at its lowest as far as percentage of Revenue. And as Revenue grows and this thing stays steady, it's going to become a smaller and a smaller percentage until it's absolutely meaningful.

Now let's keep going right here. A few more things I Wanted to highlight here. This is another thing I Want to show you here So these are the treasuries in case you were wondering where the company's money is at because you're not seeing cash and cash equivalents being the same as they were in the previous quarter. That's where they are money market fans.

Use Treasury Securities You get Treasury Securities Etc et cetera. and this thing says four percent because hey, why keep it in the bank and get zero percent when you can get four percent with zero risk? That's Palantir. just being smart. Absolutely amazing.

Beautiful. This is the credit facility I told you about I Went into the actual you know part where they actually explained this. If you want to read this, pause the screen, read this. but essentially what this is, a bank gave them 900 million dollars of a credit line.

they can withdraw anytime. They haven't used it. Zero dollars used and that's been open since 2014. So since 2014, almost in 10 years they've not used a single dollar out of this they never had.

Very, very simple. Absolutely impressive. And let's keep going here a little bit. And this is the part where I'm a little bit unhappy because look, government is doing great, but the fact of the matter is, government is still 55 of the revenue.

Last last year, Q1, government was 55 this year. As you can see on the screen, government is still 55. So I would like to see 60 commercial, 40 government. That's kind of my vision for this company.

They're still not there yet. The commercial side needs to grow faster. I've said it before. going to say it again and this is a point that needs to be actually critiqued.

Another point of criticism for me for Palantir and again, it's a good thing they're going for the U.S market. The U.S Business Software Market is the best in the world. It has the most amount of money, the most amount of opportunity I Get it Why You go through the US market? It's absolutely the best in the world, Sure, But you cannot ignore the geographical risks. That's why I said Geo Risk Here, You cannot ignore the Geo risk here because if you're focused, if you're 64, if two-thirds of your business is in one country, that means that your Geographic risk is just too big.

Ideally, you would want to see 20 U.S 20 UK 20 rest of EU 20 rest of the world Etc et cetera. So you would want to see more distribution around the world for this company, not just be a Us targeted company just to eliminate that risk. Another thing that needs to be addressed by volunteer: I Get it, They're going for the US first. They want to take over that market first and it makes sense.

but at some point we'll have to press them as investors on this issue as well. Geographic Risk needs to be attended to. Another point that I Want to show you here. Where is this? Okay, so this is also very important.

So they grew customers by 41 from 277 to 391. That's great. But look at this thing right here. I Spoke about it before going to say it again.

but also risk. Why did I say why Also Risk? Because when your top 20 clients are giving you a billion dollars in Revenue, that's very impressive. But also it means half of your business is coming from your top 20 clients, which is very dangerous. It's huge amount of client concentration risk and it doesn't make me feel comfortable at all.

Now my thoughts about this are very, very simple: I Think that Palantir is a great long-term investment I Think that yesterday was a beautiful spike. It will probably at some point have to correct itself after every 20 25. Spike There's always a correction whether it happens today or tomorrow next week. I Don't know I Said it before.

Gonna say it again I Haven't gambled before earnings I Don't buy or sell stock right before earnings I Don't gamble like that. My position is still very, very big with Palantir. It's my biggest position and I was happy to see them succeed and I will be happy to stay a planetary investor as they're getting absolutely phenomenally better in every single category, They, in my opinion, have presented a very strong case to being the next. Tesla As far as the strength of the balance sheet, as far as their clients, as far as the management, as far as the way the margins are starting to look, as far as their strength in the category, they seem to be basically breaking apart from the competition like Tesla did, etc, etc, etc, this smells a lot like Tesla to me.

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