Specialist
Former executive at Palantir Technologies Inc
Agenda
- Palantir’s (NYSE: PLTR) overall operating environment and growth outlook for government and commercial verticals, emphasising commercial segmentation and growth
- Competitive positioning in the growing market for AI platforms across C3.ai (NYSE: AI), the major cloud vendors and others
- Scalability and other benefits of a self-service offering
- Product roadmap, platform consolidation and importance of Apollo
- Industry trends and financial recent performance
Questions
1.
Could you describe Palantir as a company, its value proposition and what it’s delivering? How is the company’s technology changing, and how is it trying to grow further in the market?
2.
Could you discuss Palantir’s three buckets – Foundry, Gotham and Apollo? How is each growing?
3.
Palantir’s Q4 2022 earnings release showed commercial revenue growth of 11% YoY and government revenue growth of 23% YoY. Are those two growth rates directly reflective of the growth in those two products, or is there some overlap between the two?
4.
As Palantir attempts to move towards more of a self-service model and tries to increase scalability and decrease costs, how is this affecting the company? What major strategic changes is it making?
5.
How is Palantir trying to increase scalability with more of a self-service model? What’s the most important thing to consider here?
6.
What is the margin impact of moving towards more of a self-service model? There’s clear upside here. How might you quantify the margin impact?
7.
In Q4 2022, loss from operations for Palantir was reported as USD 18m and represented a margin of negative 4%, which was up 1,000bps YoY. Looking at full-year 2022 in retrospect, that was up 1,900bps YoY. What are your expectations for one year from now, or where do you think that margin might be, given loss from operations continuing to decrease with this model?
8.
What margin improvement has Palantir experienced historically and how has that shifted with the move to a self-service model? Has there been a clear increase since that has started to occur with the company?
9.
Could you talk about the importance of the Apollo offering and how that relates to Palantir’s efforts to try to become more of a self-service model? What’s most important to understand about Apollo?
10.
Palantir reported its first profitable quarter in Q4 2022. Revenue grew 18% YoY to USD 509m and total 2022 revenue grew 24% YoY. What is your reaction to this recent growth and what’s been driving it?
11.
Total 2022 commercial revenue grew 29% YoY for Palantir. However, US commercial revenue grow 67% YoY to USD 335m. Could you outline the growth opportunity for the company in the commercial segment and how it’s pursuing this opportunity today?
12.
Given Palantir’s higher growth rate in the US vs total commercial revenue, where has that concentration in growth been in the US? You mentioned it’s vertical agnostic. Has the company been leading with any particular vertical?
13.
Can you talk about Palantir’s opportunity to move into the mid-market or more SMB customers? How has the company been doing with this opportunity, given that’s not typically the type of customer it services?
14.
What’s your opinion on Palantir’s ability to move further into the mid-market, given it’s a more crowded landscape?
15.
What’s driving scenarios where Palantir attempts to gain a new customer in the mid-market and the customer decides not to go with the company? Is it just the heavy lift required in implementing the Palantir offering vs other solutions in the market? What else could be driving it?
16.
What incumbent players are similar to Palantir in the crowded competitive landscape?
17.
The vendor that comes to mind is C3.ai, and, historically, it has led with more of a self-service model, so it seems it was first in the commercial market to have this type of model, although there is not a one-to-one comparison. How would you characterise the competitive dynamic between C3.ai and Palantir in the commercial market?
18.
Do you have any other comment on competitive risks to Palantir, whether vendors that are already incumbents in the space or potential cloud vendors such as Google?
19.
What internal changes is Palantir implementing to move more towards the commercial market? You mentioned, for instance, hiring sellers that are better equipped or have more vertical experience. Could you speak to the changes going on at the company to accommodate the shift towards commercial?
20.
Palantir recently cut 2% of its workforce. There have been cuts trending in the industry right now, so a 2% cut is not necessarily indicative of that much, but what is your take on this? Was this surprising at all to you, and is the company perhaps trying to implement more strict cost controls?
21.
What comes to mind as being the most significant headwind impacting Palantir?
22.
What is the approximate split of the recent revenue growth between new logo and expansion opportunities with existing customers?
23.
Could you discuss the revenue expansion opportunities for Palantir? Is this a big opportunity for the company with existing customers, or typically do contract sizes stay the same?
24.
Looking at how the opportunities increased revenue per customer for Palantir, what kind of multiple on contract size could the company see thought these later-day expansions?
25.
Palantir Q4 2022’s total revenue was USD 509m, commercial revenue was USD 215m and government was USD 293m. How do you see revenue mix perhaps shifting to commercial revenue in three years? Currently it’s less than 50%. Could you give any approximation of where you see that mix shifting to?
26.
Palantir’s commercial revenue growth for Q4 2022 specifically was only 11% YoY and US commercial was 12% YoY. Could you give your expectations for a potential growth rate? Do you see that climbing? If so, by how much?
27.
Palantir CEO Alex Karp recently commented that the company had received some acquisition interest. Could I get your view on Palantir as an acquisition target, and what kind of company do you think would represent a potential buyer, given how unique its offering is?
28.
If we were to narrow the focus to the three large cloud vendors – AWS, Microsoft and Google – do any come to mind as being best-positioned, given the historical relationships across the companies?
29.
Given the recent interest in the market around generative AI and Palantir’s positioning as one of the few public pure-play AI companies, what is your outlook for the opportunity to incorporate generative AI into the company’s offering? Do you think it will be incorporated? If so, will this potentially be a secondary offering, or will it just be to improve search and interface capabilities?
30.
Do you know if Palantir was working on generative AI historically and if the company sees this as a serious risk?
31.
Does generative AI seem to be a serious risk for Palantir as more companies become interested in adopting it, or do we have to wait and see? Is there no indication yet of that risk?
