Palantir's Government Business Grew 96%. Commercial Grew Faster and Passed It.

Palantir Technologies closed the third quarter of 2026 with a first in company history. U.S. commercial revenue reached $984 million, ahead of U.S. government revenue of $953 million, according to the Exhibit 99.1 release filed with the SEC on Nov 2, 2026. Chief Executive Officer Alex Karp stated the crossing in the filing: "Our U.S. commercial revenue has surpassed our U.S. government revenue for the first time in our company's history."

The mix shift is the story, not a stall in Washington. Total quarterly revenue hit $2.313 billion, up 96% year over year from $1.181 billion and up 20% quarter over quarter, the first time Palantir has cleared $2 billion in a single quarter. U.S. revenue was $1.937 billion, up 119% year over year and 23% quarter over quarter. Inside that domestic print, commercial did not merely keep pace with government. It ran past a franchise that was itself still expanding at a near doubling rate.

The crossing happened with government still booming

U.S. government revenue rose 96% year over year and 18% quarter over quarter, to $953 million. A government book growing at that clip would, in most software histories, still define the firm. Palantir's U.S. commercial line grew 148% year over year and 29% quarter over quarter, to $984 million, and that was enough to take the lead anyway.

The deal tape matches the mix. The quarter closed 212 deals of at least $1 million, 107 deals of at least $5 million, and 64 deals of at least $10 million. Total contract value closed was $2.918 billion, up 6% year over year. U.S. commercial TCV was $1.463 billion, up 11% year over year. The commercial side is no longer a satellite of the government franchise. It is writing a larger share of the large-ticket contracts even as those government contracts keep landing.

Profitability scaled with the top line. GAAP and adjusted operating income were $1.085 billion and $1.427 billion, margins of 47% and 62%. GAAP net income attributable to common stockholders more than doubled, to $1.128 billion from $475.6 million a year earlier. Diluted earnings per share were $0.44 on a GAAP and adjusted basis, versus $0.18 a year earlier. Cash from operations was $1.205 billion, a 52% margin, and adjusted free cash flow was $1.216 billion, a 53% margin, leaving cash and U.S. Treasury securities at $10.4 billion. Palantir's Rule of 40 score was 158%.

The backlog says the commercial surge is not a one-quarter pull-forward

The number that makes the crossing durable is remaining deal value, not the quarterly revenue print. U.S. commercial RDV reached $6.517 billion, up 79% year over year and 4% quarter over quarter. That stock of contracted work sits in front of the revenue line. A 148% growth rate could still be a timing story if implementations were pulled into one quarter; a deal value up 79% from a year earlier is harder to dismiss. The commercial book is larger going forward, not only larger in the quarter just reported.

Guidance treats that backlog as something management is willing to underwrite. Palantir guided fourth-quarter 2026 revenue to $2.649 billion to $2.653 billion. Full-year 2026 revenue was raised to $8.530 billion to $8.534 billion. Full-year U.S. commercial revenue guidance was raised to in excess of $3.559 billion, implying at least 143% growth. Full-year adjusted income from operations guidance is $5.245 billion to $5.249 billion. The commercial raise is the tell. Management is not describing a one-time mix flip; it is raising the commercial run rate after the first quarter that line already overtook government.

Speaking to CNBC, Karp described the results as unlike "anyone has had consistent results like this in the history of software AI" and said the business is succeeding "without salespeople." Those lines sit beside the filing, not in place of it. The filing is the mix, the RDV, and the raise. The interview is the founder's reading of why commercial demand is compounding this fast.

The market already has a price on the transformation

The print cleared the Street. Palantir beat LSEG consensus, with adjusted earnings of 44 cents versus 41 cents expected and revenue of $2.31 billion versus $2.18 billion expected. Shares still slipped about 3% in after-hours trading. That reaction does not unwind the inflection. It says the near doubling, the commercial overtake, and the raised commercial guide were already inside the multiple. A company that can grow U.S. government revenue 96% and still have commercial lap it is no longer being valued as a defense software contractor with a commercial option. It is being valued as if the commercial AI conversion is the base case.

That is the honest tension in the quarter. Palantir's growth now rests on commercial AI adoption that is backlogged forward, not on any single government contract. That commercial RDV is the evidence the overtake can persist past one reporting period. The after-hours fade is the evidence that the market has already paid up for that conversion. The crossing is real. So is the price of it.