Episode Details

Palantir Technologies Inc. (PLTR) Q2 2026 — Reported after the close on August 3 (the three months ended June 30, 2026). Revenue $1,935.5M, up 92.8% from $1,003.7M against a Street number near $1,810M — growth ACCELERATED from 48%. GAAP diluted EPS $0.41 vs $0.13. GAAP operating margin 47.1% from 26.8%; adjusted 62%. Rule of 40 score 155%, from 94%. Adjusted free cash flow $1,220.4M at 63%. Every line of guidance raised. The stock closed at $125.65 and traded to about $144.42 after hours, near +15% — but it went into the print 39% below its November high of $207.18. The number nobody read: revenue grew 93% but total contract value grew 49%. Book-to-bill fell from 2.26x to 1.74x. And when you subtract U.S. commercial TCV ($2.132B, +153%) from the $3.373B total, everything else — U.S. government plus ALL of international — booked $1.241B against $1.427B a year ago. That is DOWN 13%. Roughly 60% of the revenue base signed less new contract value than a year ago, in the quarter the CEO called otherworldly. THE CALL: AVOID (3/5, EXTRAORDINARY BUSINESS. IMPOSSIBLE PRICE.) — base-case value ~$92.0 vs ~$144.42 today. KEY METRICS: - THE CALL: AVOID 3/5 - fair value ~$92 vs ~$144 after hours (-36%) and the $125.65 close (-27%); Street average $167.67. OWNER EARNINGS: guided FY26 adjusted operating income $4.893B, plus ~$0.32B interest, LESS ~$1.10B stock comp, taxed at Palantir's OWN stated 23.0% long-term rate = $3.17B, against $4.6B of headline adjusted FCF. DCF GRID (bear/base/bull x 9/10/11%): $60-52-46, $101-84-72, $143-116-98 - exactly ONE of nine cells clears $144. REVERSE DCF: $144 needs $5.55B of owner earnings starting TODAY vs $3.17B actual; our base case does not reach it until 2028. - THE UNDER-COVERED ANGLE - REVENUE +93%, BOOKINGS +49%. Total contract value closed was $3.373B (+49%) against revenue +92.8%, so book-to-bill fell from 2.26x to 1.74x. Subtract U.S. commercial TCV ($2.132B, +153% from $843M) and everything else - U.S. government plus ALL of international - booked $1.241B vs $1.427B a year ago, DOWN 13.0%. Roughly 60% of the revenue base signed LESS new contract value. THE TAX CLIFF: a 1.4% effective rate ($15.4M on $1,081.3M) while the accumulated deficit fell -$3,562M to -$1,630M and flips positive within months; Palantir's own long-term rate is 23% - about $1.1B a year, ~$40/share in our DCF. - AND THE BEAR CASE THAT DIED: diluted shares 2,562,912k to 2,568,694k, +0.23% for a full year; SBC/revenue fell 15.9% to 13.7%; GAAP EPS $0.41 EQUALS adjusted EPS $0.41. Our case is price, not dilution. Sources: Ex-99.1 to the 8-K of 2026-08-03 (accession 0001321655-26-000039) and the Q2 2025 Ex-99.1 (0001321655-25-000105), both grepped for 'Palantir' and the period first. International revenue, book-to-bill and non-U.S.-commercial TCV are DERIVED by arithmetic. What to watch: Bullish: book-to-bill back above 2.0x (bookings growing at least as fast as revenue, removing the arithmetic ceiling); international revenue re-accelerating above 50% (it grew ~34% vs 115% for the U.S.); U.S. commercial RDV compounding above 100% (now $6.238B, +124%). Get the first two and our value moves toward $130. Bearish: U.S. commercial growth below 100% — that one segment is carrying everything; TCV growth under 30%; or the effective tax rate stepping into the twenties as the NOLs run out. Any two and we are in the sixties. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.