(Bloomberg) — Palantir Technologies Inc. forecast sales of its data software will grow 33% in the third quarter, reflecting heightened demand from government agencies and that more companies are beginning to sign up.
Revenue will be about $385 million in the period ending in September, the Denver-based company said in a statement Thursday. That exceeds the company’s previous outlook as well as an average of analysts’ estimates compiled by Bloomberg. The shares jumped more than 7% in the first minutes of trading Thursday.
Palantir has been recruiting an array of corporate allies with the goal of attracting new customers. It forged partnerships this year with International Business Machines Corp. and Fujitsu Ltd. to resell its technology and with Amazon Web Services to support it. Palantir also expanded its own sales team.
The search went even wider last month to include small companies. Palantir began selling its software through a monthly subscription to a handful of startups connected to former employees. The company also invested in a dozen startups and signed them up as customers, marking a reversal of its previous approach to only pursue large deals.
“We’ve always invested in companies. Now we can do it with our balance sheet,” Kevin Kawasaki, the head of business development, said on a conference call with analysts Thursday. “This is a long-term strategy.”
The shifting strategy came at a cost. The second-quarter loss was 7 cents a share. Stock-based compensation accounts for a hefty portion.
Sales results in the quarter were encouraging. Palantir reported $376 million in revenue for the period that ended in June, up 49% from a year earlier.
Many government agencies have flocked to Palantir since last year to help them analyze the Covid-19 pandemic. Government sales remained healthy in the second quarter at a growth rate of 66%, the company said. It was 83% in the first quarter.
The U.S. National Nuclear Security Administration, the U.S. Coast Guard, the Federal Aviation Administration and the U.S. Centers for Disease Control and Prevention all signed deals during the second quarter. “The government business is on fire,” said Shyam Sankar, the chief operating officer.
Corporate customers make up a smaller pool of Palantir’s revenue, but renewed efforts there appear to be paying off. U.S. sales growth in the commercial segment was 90% in the second quarter.
(Updates with shares in the second paragraph.)
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