Palantir reported Q2 2026 after the close today, and beat both marks: revenue of $1.935 billion against consensus of $1.81 billion, GAAP diluted EPS of $0.41 against $0.34.
Palantir beating is not new. The number worth stopping on is the one Alex Karp put in his own quote — a Rule of 40 score of 155. Computed here, on the definition applied to every company on this site, it comes out at 154.9.
Both halves went up
The Rule of 40 adds revenue growth to free-cash-flow margin, and it works as a screen because those two normally trade against each other: spend to grow and margin falls, harvest margin and growth falls. Palantir did not trade.
| Q2 2025 | Q2 2026 | |
|---|---|---|
| Revenue | $1,004M | $1,935M (+92.8%) |
| Gross margin | 80.78% | 84.66% |
| GAAP operating income | $269M (26.8%) | $912M (47.1%) |
| Free cash flow | $532M (52.9%) | $1,202M (62.1%) |
| GAAP diluted EPS | $0.13 | $0.41 |
| Rule of 40 | 101.0 | 154.9 |
Growth accelerated, from 84.7% last quarter to 92.8% this one, at a revenue run rate now approaching $8 billion. That is the rarest thing in the release. It is not a small-base effect either — the comparison quarter itself did over a billion dollars.
Three things underneath the number
Bookings are outrunning revenue. Closed total contract value of $3.373 billion, up 49%, including a record $2.132 billion of U.S. commercial TCV, up 153%. U.S. commercial remaining deal value reached $6.238 billion, up 124% year over year and 27% sequentially. Revenue growth of 92.8% is the trailing consequence of a pipeline growing faster still — which is the strongest argument that the acceleration is not finished.
Costs scaled sub-linearly. Revenue grew 92.8%; total operating expenses grew 34.2%; general and administrative grew 19.7%. That gap is the whole reason the cash half of the score is 62 rather than 30. GAAP operating margin went from 26.8% to 47.1% without the company slowing down to get there.
The commercial engine is now the story. U.S. revenue rose 115% to $1.573 billion, split between U.S. commercial at $764 million (+149%) and U.S. government at $809 million (+90%). Government is still the larger half, but commercial is closing on it and growing at nearly twice the government rate. Palantir closed 220 deals of at least $1 million, 98 of at least $5 million, and 73 of at least $10 million.
Guidance went up on every line
- Q3 2026 revenue of $2.160–2.164 billion
- Full-year revenue raised to $8.150–8.158 billion, +82% year over year
- Full-year U.S. commercial revenue raised to more than $3.424 billion, +at least 134%
- Full-year adjusted income from operations raised to $4.889–4.897 billion
- Full-year adjusted free cash flow raised to $4.5–4.7 billion
- GAAP operating income and net income still expected in every quarter of the year
The size of the full-year revenue raise alone exceeds Palantir's entire 2023 revenue. Cash, equivalents and short-term Treasuries stand at $9.2 billion.
One footnote on the 155
Palantir's self-reported score uses its adjusted free cash flow. Ours uses operating cash flow minus capital expenditure, the same definition applied to all 66 companies here. The two agree this quarter — adjusted FCF of $1,220M against our $1,202M — because the gap between them happened to be small.
That agreement is a coincidence of this quarter, not a rule. In other quarters Palantir's adjusted figure has run well above the standard one, and a score built on it is not comparable to the scores on the rest of this site. It is worth saying plainly because the two numbers landing on 155 together invites the assumption that the bases are interchangeable. They are not.
What to watch
- Whether the two halves stay uncoupled. The signal here is not the level, it is that growth and cash margin rose together again. The quarter one is bought with the other is the quarter the story changes.
- The deceleration that has to come. Repeating 92.8% growth a year out means finding roughly $1.8 billion of incremental quarterly revenue. Deceleration is near-certain and is not itself news; whether the score holds above 100 through it is.
- Whether commercial passes government. On the current growth rates, U.S. commercial overtakes U.S. government revenue within a couple of quarters. That would be the clearest sign the business has changed shape.
Figures are from Exhibit 99.1 of Palantir's 8-K filed 2026-08-03 (accession 0001321655-26-000039), for the quarter ended 2026-06-30. Free cash flow is operating cash flow minus purchases of property and equipment; the release states cash flow year-to-date, so the quarter is derived as year-to-date less Q1 2026 and reconciles to the release's own "cash from operations of $1.216 billion". Consensus figures are the pre-release Wall Street estimates we carried on our earnings preview.