Palantir's Last Three Years: From 'We Have a History of Losses' to Mocking Short Sellers

The story

Late 2023: still explaining itself

In Q3 2023, Palantir was a freshly profitable company — revenue growth of 17%, and a Rule of 40 score (revenue growth plus adjusted operating margin) of just 46. The FY2023 10-K's risk summary still opened with the same line it always had: "we have a history of losses, and we may not be able to achieve or maintain profitability." CEO Alexander Karp's tone on the call was still somewhat defensive — "we believe in a mission-driven culture" — the language of a company that still needed to explain and persuade skeptics.

"We are on fire"

The turn began in late 2023 around the launch of AIP, Palantir's generative-AI platform. By the Q1 FY2024 call, Karp was declaring: "We are on fire." Revenue growth jumped to 21%, Rule of 40 to 57. From here on, a clear pattern set in — issue guidance, then beat the top of the range — and by Q3 FY2024 the company beat its own guidance ceiling by 450 basis points.

The company quietly changed how it talks about itself

The FY2024 10-K softened "we have a history of losses" into the past tense: "until recent quarters, we had a history of incurring net losses." By the FY2025 10-K, the line was gone from the top of the risk summary entirely — pushed down from #1 to #5. Taking a much higher spot instead — #4, up from #34 (nearly last) in both FY2023 and FY2024 — was a new-old worry: "we may not realize the full deal value of our customer contracts." That risk's sudden promotion tracks directly with Total Remaining Deal Value nearly tripling, from $3.9B to $11.2B, over the same span.

The tone peaks — and turns combative

By Q3 FY2025, the shift reached its peak. Rule of 40 jumped 20 points in a single quarter to 114 — a "record, defining enterprise software company of our generation," in the company's own words — and Karp openly mocked short sellers in the Q&A: "Watch us on TV, buy some popcorn, and watch how unhappy the people who didn't invest in us are." Political commentary, unrelated to the business itself, also began appearing more freely in his remarks around this time.

Where it stands now

By Q2 FY2026, Rule of 40 had reached an all-time high of 155 — 12 consecutive quarters of improvement — and guidance was raised by what the company called its largest margin ever. The overtly political rhetoric of Q3 FY2025 cooled somewhat, replaced by a "getting bigger and bigger" grand narrative about the company's trajectory.

Guidance scorecard

5 of 5 confirmed periods beaten (100%) — and the beat margin has widened over time: +450 basis points (Q3 FY2024) → +350 bps (Q1 FY2025) → +1,300 bps (Q3 FY2025). This is a textbook "guide conservatively, then beat" pattern, but one where the size of the cushion itself keeps growing.

Source: each earnings call's CFO guidance commentary, checked against 10-K FY2023–FY2025 and Q2 FY2026 10-Q reported figures.

Timeline

• Q3 2023Fourth straight quarter of GAAP profitability; Rule of 40 at 46; risk summary still led with "history of losses."
• Q1 2024"We are on fire" — the first clear tonal shift; revenue growth 21%, Rule of 40 57.
• FY2024 10-K (filed Feb 2025)"History of losses" language softened to the past tense.
• FY2025 10-K (filed Feb 2026)"History of losses" line dropped (#1 → #5); "may not realize full contract value" risk jumps (#34 → #4); "external scrutiny" language added; buyback-program risk removed.
• Q3 2025Rule of 40 hits 114 (+20 points in a quarter, an all-time high at the time); Karp mocks short sellers and injects political commentary — peak combative tone.
• Q2 2026 (most recent)Rule of 40 reaches an all-time high of 155, 12 straight quarters of improvement; "largest guidance raise ever."

Our read

The real story here is less about the acceleration in the numbers — though it's real — and more about the company's own evolving sense of what it has to fear. A firm that once had to convince the market it would ever turn a profit now worries instead about collecting on the huge promises already signed, and about the reputational fallout from having become this visible and this politically outspoken. The risk worth watching is whether Q3 FY2025's political tangents and combative short-seller mockery end up being exactly the kind of behavior that makes the newly added "external scrutiny" risk factor come true.

What we still don't know

• Only 6 of the last 12 quarters' calls were reviewed for this analysis (Q2 and Q4 FY2024, Q2 and Q4 FY2025, and Q1 FY2026 weren't included) — reading all 12 could reveal finer tonal swings this pass may have missed.
• Whether the lack of visibly skeptical questions in the Q&A sessions reflects genuinely low skepticism, or simply which analysts get called on can't be determined from the transcripts alone.
• The full body text of each risk factor (beyond the summary list) wasn't compared line by line — a more granular pass might surface subtler confidence shifts (e.g., "will" versus "may" language).