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Palantir just posted its fastest revenue growth since it went public in 2020.
The results were not close to expectations. They were dramatically above them. And the company followed it up by raising its full-year forecast by a margin that forced Wall Street to sit up and recalibrate.
The reason behind it is what makes the numbers even more significant.
Palantir reported Q1 2026 revenue of $1.633 billion, up 85% year over year and 16% sequentially. That beat the LSEG analyst consensus of $1.54 billion, CNBC reported. It was also the eleventh consecutive quarter of accelerating revenue growth, Palantir's Q1 press release confirmed.
Adjusted EPS came in at $0.33, beating the $0.28 consensus. GAAP EPS was $0.34. Adjusted free cash flow reached $925 million at a 57% margin. Palantir ended the quarter with $8 billion in cash, cash equivalents, and U.S. Treasury securities.
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CEO Alex Karp captured the moment directly.
"Palantir's Rule of 40 score has soared to 145%. We have shattered the metric, a feat matched only by other fellow AI infrastructure companies: NVIDIA, Micron and SK hynix. Momentum surged as we grew 85% last quarter, our highest-ever year-over-year growth rate, by more than doubling our U.S. business," Karp said, according to Palantir.
The standout number in Palantir's results is U.S. government revenue. Government revenue from U.S. agencies climbed 84% year over year to $687 million, accelerating from 66% growth in Q4, CNBC noted. Palantir also confirmed a $300 million USDA contract during the quarter.
Government contracts matter for Palantir beyond the revenue line. They are long-duration, deeply embedded, and difficult to replace once the software is integrated into agency operations. That stickiness is one of the main reasons investors assign Palantir a premium valuation relative to peers.
The government business also gives Palantir a durable floor. Even as the commercial side of the business attracts more attention, the government segment remains the foundation that supports the company's long-term revenue visibility.
U.S. commercial revenue grew 133% year over year to $595 million. That beat expectations but came in slightly below the StreetAccount consensus of $605 million, CNBC indicated. Palantir closed the quarter with 615 U.S. commercial customers, a 42% increase year over year, Yahoo Finance reported.
The deal activity was significant. Palantir closed 206 deals worth at least $1 million, 72 deals worth at least $5 million, and 47 deals worth at least $10 million in the quarter. Total contract value reached $2.41 billion, up 61% year over year. U.S. commercial remaining deal value hit $4.92 billion, up 112% year over year.
During the quarter, Palantir unveiled commercial deals with Airbus, Bain, GE Aerospace, and Stellantis, CNBC noted. That breadth of industry coverage reinforces the argument that Palantir's AI platform is not confined to a single vertical.
Palantir raised its full-year 2026 revenue guidance to between $7.650 billion and $7.662 billion, representing 71% growth year over year, according to the company. That is 10 percentage points higher than the guidance issued last quarter. The new midpoint of $7.656 billion compares to the prior LSEG analyst consensus of $7.27 billion.
Palantir also raised its U.S. commercial revenue guidance to $3.224 billion-plus for the full year, representing growth of at least 120%. Q2 revenue guidance of $1.797 billion to $1.801 billion came in well above the $1.68 billion analyst consensus, CNBC confirmed.
Karp went further in a CNBC interview, saying he expects the U.S. business to double again in 2027. That is a significant statement from a CEO whose company just posted 104% U.S. revenue growth.
Q1 2026 revenue: $1.633 billion, up 85% year-over-year, beating the $1.54 billion consensus, according to Palantir
Adjusted EPS: $0.33 vs $0.28 consensus; GAAP EPS: $0.34, Palantir confirmed
U.S. government revenue: $687 million, up 84% year-over-year, accelerating from 66% in Q4, CNBC reported
U.S. commercial revenue: $595 million, up 133% year-over-year, with 615 customers up 42% year-over-year, according to Yahoo Finance
Adjusted free cash flow: $925 million at 57% margin; cash on hand: $8 billion, Palantir noted
Rule of 40 score: 145%, Palantir confirmed
FY2026 revenue guidance: $7.650 billion to $7.662 billion, up 71% year-over-year, 10 points above prior guidance, Palantir noted
Q2 2026 revenue guidance: $1.797 billion to $1.801 billion versus $1.68 billion consensus, according to CNBC
Palantir's results are exceptional. Its valuation is also exceptional. The stock has been trading at a significant premium to software peers, which means every quarter has to clear a very high bar to justify the multiple.
Q1 cleared that bar. But the guidance raise also raises the bar for Q2 and beyond. Karp's comment that U.S. revenue could double again in 2027 is bold enough that the market will hold him to it. If growth decelerates meaningfully from the 85% pace, the premium multiple becomes harder to defend, even with strong absolute numbers.
The deal activity in Q1 provides some reassurance. Closing 47 deals worth $10 million or more in a single quarter is not a fluke. The $2.41 billion in total contract value gives Palantir a revenue pipeline that extends well beyond the current quarter. And the commercial customer count growing 42% year over year suggests the platform is still in relatively early innings of enterprise adoption.
The government acceleration from 66% to 84% growth in a single quarter is the detail that should get the most attention. It suggests the U.S. government is not just maintaining its Palantir relationship; it is deepening it.
That trend, if it continues, makes the current multiple look less aggressive than critics argue.
Related: Morgan Stanley resets Palantir stock forecast
This story was originally published by TheStreet on May 5, 2026, where it first appeared in the Markets section. Add TheStreet as a Preferred Source by clicking here.