(Reuters) -U.S. data analytics firm Palantir Technologies on Tuesday forecast current quarter revenue to be above Wall Street expectations backed by a strong portfolio of both commercial and government contracts, including with the U.S. Army.
Exceeding expectations for third-quarter revenue, the company said it added 34 net new customers and closed 54 deals of $1 million or more.
Palantir, which provides its software to the United States and its allies, is known for its work with government agencies such as the Central Intelligence Agency.
Palantir has had a steady flow of deals from the public sector, including one with the U.S. army to deploy its software to help in defense decision-making as well as a continuing contract with the U.S. National Institutes of Health to support COVID-19 research during the current quarter.
However, shares of the company, backed by tech billionaire Peter Thiel, were down 2.4% at $26.1 in volatile trading before the bell.
Many analysts have raised concerns over Palantir’s dependence on government contracts and its high stock valuation, with frequent mentions of the latter on Reddit’s WallStreetBets forum sending its stock rallying at the beginning of this year.
Palantir has since added many more commercial deals, including a strategic partnership with IBM earlier this year. The company said its U.S. non-government revenue more than doubled during the third quarter.
Palantir forecast fourth-quarter revenue of $418 million, above analysts’ average estimate of $401.9 million, according to IBES data from Refinitiv.
Excluding items, the company earned 4 cents per share, in line with estimates.
Revenue rose 36% to $392.2 million in the quarter ended Sept. 30, above expectations of $385 million.
(Reporting by Chavi Mehta in Bengaluru; editing by Arpan Varghese)