Palantir Technologies delivered a significantly stronger-than-expected second-quarter performance, sending its shares more than 12% higher in after-hours trading as the artificial intelligence software company reported exceptional growth across both its government and commercial businesses.

The company posted adjusted earnings of $0.41 per share, comfortably exceeding analysts’ expectations of $0.35 per share. Revenue reached $1.94 billion, well above the consensus estimate of $1.80 billion and representing a 93% increase from approximately $1.0 billion during the same quarter last year.

Net income climbed to $1.07 billion, or $0.41 per share, compared with approximately $329 million, or $0.13 per share, a year earlier.

Commercial Business Becomes Major Growth Driver

While Palantir has historically been recognized for its work with U.S. government agencies and defense organizations, its commercial business continued to emerge as one of the company’s strongest growth engines.

U.S. commercial revenue surged 149% year over year to $764 million. Management also noted that, on a compounded basis, the segment has expanded approximately 380% since 2024.

Remaining U.S. commercial contract value more than doubled from a year ago to $6.24 billion, providing strong visibility into future revenue growth.

Reflecting the momentum, Palantir raised its forecast for U.S. commercial revenue in 2026 to more than $3.42 billion, compared with previous guidance of $3.22 billion.

Government Business Remains Robust

Government operations also continued to deliver strong results.

Revenue from U.S. government customers increased 90% year over year to $809 million, highlighting sustained demand for Palantir’s artificial intelligence platforms across defense, intelligence, and federal agencies.

The combination of expanding government contracts and accelerating enterprise adoption has significantly diversified the company’s revenue base compared with previous years.

Full-Year Guidance Raised

Following the strong quarterly performance, Palantir increased its outlook for the full fiscal year.

The company now expects 2026 revenue between $8.15 billion and $8.16 billion, an increase from its prior guidance range of $7.65 billion to $7.66 billion.

The revised forecast reflects continued strength in AI software adoption across both public and private sector customers as organizations increasingly integrate generative AI into business operations.

CEO Sees Extended AI Growth Cycle

Chief Executive Officer Alex Karp expressed confidence that demand for enterprise AI remains in its early stages.

Speaking after the earnings release, Karp argued that the company’s growth substantially exceeds what businesses of similar size have historically achieved, stating that Palantir’s expansion “looks like this is going to go on for at least another 18 months.”

Despite the strong results, Palantir shares remain down approximately 29% for the year as investors have questioned whether the broader AI investment cycle can sustain its rapid pace.

Open-Weight AI Models Remain Strategic Priority

Karp also reiterated his support for open-weight artificial intelligence models, arguing that increased competition is essential for innovation.

Palantir recently joined several major technology companies in signing an industry letter urging policymakers not to impose restrictions on open-weight AI models. The company believes open competition will help ensure American AI developers remain competitive against rapidly improving Chinese open-source models.

According to Karp, maintaining multiple high-quality AI models is essential to preserving innovation and strengthening enterprise software development in the United States.

Outlook

Palantir’s second-quarter results reinforce the company’s position as one of the fastest-growing enterprise AI software providers, driven by accelerating commercial adoption while maintaining strong government demand. The substantial increase in commercial contract value, improved revenue guidance, and continued profitability suggest that enterprise AI spending remains robust despite broader market concerns surrounding the sector. Investors will now focus on whether Palantir can sustain its rapid commercial expansion while continuing to convert its growing contract backlog into long-term recurring revenue.