(Bloomberg) -- Palantir Technologies Inc. raised its annual forecast for adjusted profit in 2023 and authorized a $1 billion share buyback on the strength of what it called “transformative” traction for its artificial intelligence technology.
“We have a good chance at becoming the most important software company in the world,” Chief Executive Officer Alex Karp told Bloomberg during an interview Monday. “Demand is unprecedented” for Palantir’s AI, he said.
After falling as much as 12%, the shares recovered those losses and were little changed about 4:30 p.m. in New York.
The Denver-based software company said it expects to earn more than $576 million in adjusted income from operations on over $2.21 billion in revenue during 2023. In May, the company projected annual sales of $2.19 billion to $2.24 billion. The forecast exceeded analyst expectations for adjusted operating income, which were $530.3 million, according to estimates complied by Bloomberg.
Palantir has been selling predictive data analysis software to US government agencies and major companies for nearly two decades. Long a player in AI, Palantir began touting those capabilities more aggressively earlier this year, as the fervor climbed over AI advances.
The company recently launched its AI platform, called AIP, with no pricing strategy and the audacious goal described by Karp, to “just take the whole market.” In a letter to shareholders Monday, the CEO said that “the demand for AIP is unlike anything we have seen in the past twenty years.”
Palantir’s AI platform now has users across more than 100 organizations, Karp said in the letter, and the company is in sales discussions with more than 300 additional enterprises.
Palantir beat analyst estimates in the second quarter on profit and revenue. The company reported that adjusted operating income grew 25% during the during the quarter ending June 30, to hit $135 million. Revenue was $533 million, up from $473 million in 2022.
Analysts, on average, had expected adjusted operating income of $121.5 million on revenue of $532.4 million, according to estimates compiled by Bloomberg.
The company’s commercial revenue grew faster in the US than other markets, but came in slightly under analysts’ estimates, growing 10% to $232 million during the quarter compared to the same period a year ago. Analysts expected commercial revenue of $234.2 million.
Palantir revenue for government clients grew 15% to $302 million. Analysts expected $301.8 million.
Karp told Bloomberg Palantir aims to be included in the S&P 500, which requires that companies maintain certain milestones — including being profitable for a year. Palantir now has been profitable for three consecuitive quarters.
(Updates with context starting in the first paragraph.)
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