PLTR: I made a mistake, but that's great news.

Update on "Are PLTR's SPACs a SCAM?"

Editor: @Emanuele20x

I made a mistake on the SPAC article (Are PLTR's SPACs a SCAM?). I am sorry about this. However, this is actually good news!

Thank you @Govikings69 for spotting my mistake.

The “incriminated” chart is the one showing the Revenues breakdown between SPAC and non-SPAC Revenues. In the previous article, I inverted the SPAC Revenues of Q2 with Q1.

Rather than growing every quarter as I showed, Revenues from SPACs declined QoQ from $39mn to $31mn. This was due to a one-off anomaly in Revenue recognition, as highlighted by Shyam in Q1 Results call:

“Revenue in Q1 is higher as a result of some catch-up of about $9 million recognized in the quarter, reflecting work we started last year.” - Shyam Sankar, Palantir COO

While updating the numbers doesn’t change the Overall Revenues of the Commercial business, it impacts substantially the Non-SPAC Commercial Revenues I calculated by subtracting SPAC Revenues from the Total Commercial Revenues.

In the previous article, I shared my concerns on a possible red flag arising from the QoQ decline in Non-SPAC Revenues. As you can see from the chart, there was a small decline in 22q1 of $2mn but that was more than compensated by $13mn more Revenues in Q2. This eliminates the red flag on non-SPAC Commercial Revenues.

The organic growth of non-SPAC Commercial is expanding strongly.

Organic growth health is far more important than inorganic growth through SPACs because it underlines the real strength of the offering.

NON-SPAC Revenues kept expanding at 27% in Q2, consistent with the previous trend.

We can reasonably expect growth to continue and even increase in future quarters, especially boosted by the increasing contribution of US Commercial (PLTR US Commercial is the Key):

• More than 2x clients in one year: from 34 to 119 as of 22Q2;

• 59% of Commercial clients, but only 38% of Commercial Revenues

• Huge upselling opportunity: ~$4mn Avg Revenues per client, below ~$7mn from SPACs.

There is an incredible untapped potential in the Commercial business. We are only at the “planting seeds” stage (PLTR is Planting the Seeds for Exponential Growth).

I am looking forward to watching the story unfold together.

Yours,
Arny

Join me on:
Twitter: @arny_trezzi
Youtube: @Arny Investing
Instagram: @arnylaorca
Business Email: arnylaorca@gmail.com
Discord Channel

View expresses are my own. Do not represent Financial Advice.  

I own (many) PLTR 0.00%↑ stocks.