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Palantir Q3: revenue up 96%, but bookings slow

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Sources (5)
  • Good news: Revenue rose 96% year on year, the fastest since the IPO, and US commercial overtook US government for the first time.
  • Good news: Net revenue retention rose to 165%, from 157% in Q2 and well above the 120% alert line.
  • Bad news: New bookings are slowing: TCV is up only 6% year on year, and US commercial RPO rose just 4% QoQ.

What we watchWhether TCV and US commercial RPO re-accelerate in the Q4 2026 report.

Read the full notes

The core bull thesis (commercial expansion, retention, operating leverage) was fully validated this quarter. Revenue rose 96% year on year, the fastest growth since the IPO. US commercial revenue of $9.84 billion overtook US government at $9.53 billion for the first time.

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Net revenue retention (NRR) jumped to 165%, from 157% in Q2 and well above the 120% alert line. Three items offset that. (1) New bookings are slowing: TCV is up only 6% year on year, and US commercial RPO rose 4% QoQ against revenue up 29% QoQ, so the backlog is being refilled more slowly than it is consumed. (2) GAAP EPS was flattered by a 1.2% effective tax rate. At the 23% long-term rate, EPS would be about $0.34 rather than the reported $0.44. That is still up 140% year on year, so the thesis holds, but absolute values take a 20-30% haircut. (3) International commercial has stalled at +1% QoQ, and the UK MoD and NHS transparency disputes and Atos-style local alternatives are showing up in the numbers. Next to watch: whether new bookings and RPO re-accelerate, and whether international commercial stays stalled.

Key evidence

  • Revenue of $2.313 billion, up 96% YoY and 20% QoQ, the fastest growth since the IPO (Q2 was +93%)
  • US commercial revenue of $984 million (+148% YoY, +29% QoQ) overtook US government at $953 million (+96% YoY) for the first time
  • Full-year guidance raised to $8.530-8.534 billion (+91%), from a prior maximum of about $8.2 billion. US commercial guided to at least $3.559 billion (+143%). Q4 guidance is $2.649-2.653 billion
  • NRR of 165%, up 8pp QoQ (Q2 was 157%), well above the 120% alert line and still rising
  • Customer count of 1,090 TTM (+20%), of which commercial 904 (+22%) and US commercial 686 (+29% YoY, +5% QoQ)
  • GAAP EPS of $0.44 against $0.18 a year earlier, GAAP operating margin of 47%, Rule of 40 score of 158%, adjusted FCF of $1.216 billion (53% margin)
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  • SBC of $319 million, up 85% YoY and 13.8% of revenue (14.6% a year earlier). The ratio is down, but the absolute amount is up about 37% on the H1 quarterly average of $233 million
  • The effective tax rate was only 1.2% this quarter ($13.56 million of tax on a large pretax profit). Normalised at the 23% long-term rate in the company's adjusted framework, GAAP EPS would be about $0.34 against the reported $0.44, and the year-ago figure about $0.14. That is still 140% growth, so the thesis does not depend on tax, but absolute numbers take a 20-30% haircut
  • The opex scissors are widening: revenue +96% against total opex up only 46% (S&M +44%, R&D +52%, G&A +42%)
  • LinkedIn headcount flat at 5,920, with 301 job openings, down for 2 weeks running (official figure to come in the 10-Q)
  • Bookings slowdown: TCV of $2.918 billion (+6% YoY). US commercial TCV of $1.463 billion (+11%). Deals above $1 million number 212, up about 4% YoY
  • US commercial RPO of $6.517 billion is up 79% YoY but only 4% QoQ, against revenue up 29% QoQ. The backlog is being refilled more slowly than it is consumed
  • International commercial revenue of $184 million is up 21% YoY but only 1% QoQ. International government is $192 million (+31%). The US is now 84% of revenue
  • Accounts receivable of $1.883 billion (+81% YTD) consumed $843 million of cash in the first 3 quarters. Cash and Treasuries total $10.4 billion, with no debt

Catalysts to watch

  • Q4 2026 report: do new-bookings TCV and US commercial RPO re-accelerate QoQ?
  • International commercial trajectory: can it break out of the stall, especially in Europe after the UK MoD and NHS transparency disputes?
  • Official headcount disclosure in the 10-Q (against LinkedIn's flat 5,920)
  • Normalisation of the effective tax rate: when does it move towards 23%, and how does the market reprice GAAP EPS?
  • Whether SBC keeps growing in absolute dollars even as its share of revenue falls

Risks

  • If new bookings slow for 2-3 more quarters, it would eventually feed through to revenue. Current growth is masked by expansion at existing customers (165% NRR)
  • US commercial RPO up 4% QoQ against revenue up 29% QoQ: the pipeline is being consumed faster than it is replenished
  • International commercial has essentially stalled, with Europe facing transparency pushback (UK MoD, NHS) and local alternatives (Atos)
  • GAAP EPS is flattered by the 1.2% effective tax rate. Normalised, it implies a 20-30% haircut to absolute numbers
  • Receivables up 81% YTD consumed $843 million of cash in the first 3 quarters, so collection quality needs monitoring
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  • SBC in absolute dollars is up 85% YoY even as its share of revenue falls, so dilution is still accelerating
  • US revenue at 84% of the total is a single-point geographic risk

Sources 5

  1. SEC 8-K Exhibit 99.1 (primary source, all core numbers cross-checked)
  2. Palantir Q3 2026 earnings release and investor materials
  3. Q3 2026 earnings call
  4. LinkedIn headcount data (unofficial)
  5. Palantir careers page job count

A brief is a lead for our research, not a verified conclusion or advice.