Palantir Technologies has recently announced impressive earnings results, driven by double-digit revenue growth across businesses and record deal values. The software company has built its business over more than 20 years, but its recent success in applying artificial intelligence (AI) to real-world problems has helped demand explode higher.
Government and commercial customers have flocked to Palantir’s Artificial Intelligence Platform (AIP), a system that uses AI to aggregate and make the best use of customer data. The results can be game-changing, leading to better decisions, new strategies, and different ways of organizing business operations.
In its fourth-quarter report, Palantir’s numbers showed the company is hitting it out of the park when it comes to balancing growth and profitability. One key metric that stands out is the “Rule of 40” score, which has reached an impressive 81%. This financial metric evaluates how well a software-as-a-service (SaaS) company balances growth with profitability.
Reaching a Rule of 40 score indicates that a company is not only growing but also turning that growth into profit. Palantir’s ability to consistently top the rule suggests this is sustainable, offering some wiggle room during quarters that may be more difficult. The fact that it’s well beyond the minimum level suggests Palantir has expertly managed its growth and profit, which bodes well for long-term earnings and share price performance.
This achievement highlights Palantir’s ability to deliver solid earnings, making it a stock worth keeping an eye on. With record deal values and commercial customer growth, Palantir’s future looks promising.
Source: https://www.fool.com/investing/2025/02/08/meet-palantir-number-that-may-power-stock