Feb 13 (Reuters) – Palantir Technologies (PLTR.N) on Monday forecast its first profitable year and said it had slowed hiring, cut stock-based payouts and reduced cloud computing investments in response to lower spending from recession-wary businesses.
The forecast, coming on the back of better-than-expected fourth-quarter results, sent the data analytics software maker’s shares up 16% after hours and was set to add nearly $3 billion to the company’s market capitalization of $15.6 billion.
“As we look ahead to 2023, we will continue to exercise spend discipline … pace hiring while continuing to invest in high priority areas, including in our product offerings, building out our go-to-market strategy and technical roles,” said finance chief David Glazer.
The comments on cost discipline echo those from tech giants including Meta Platforms (META.O) and Alphabet Inc (GOOGL.O), which have shed thousands of jobs in the past months.
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Palantir executives also enthused over AI on an interview, saying the rise of ChatGPT was proving to be a bright spot for the sector and would help its business in 2023.
“There are many different ways we can integrate with technologies like ChatGPT and apply those technologies to our customers data,” Chief Revenue Officer Ryan Taylor told Reuters. He did not elaborate on how Palantir would do that.
Still, Palantir’s stock was up too much considering fourth-quarter profitability was driven by “below the line” adjustments like interest income and the quarter itself was in-line with expectations, RBC analyst Rishi Jaluria said.
The company forecast 2023 revenue between $2.18 billion and $2.23 billion, below the $2.29 billion estimated by analysts, according to Refinitiv.
Revenue from newly public firms that use Palantir’s services has taken a hit as economic uncertainty torpedoes the market for U.S. stock listings. That revenue is expected to nearly halve in the first quarter to $16 million from a year earlier.
Still, a jump in defense contracts following Russia’s invasion of Ukraine helped fourth-quarter revenue beat estimates with a rise of 18% to $509 million. Palantir signed deals with defense contractor Lockheed Martin (LMT.N) and the UK military in the period.
Excluding items, Palantir earned 4 cents per share, compared to estimates of 3 cents per share.
Reporting by Chavi Mehta and Tiyashi Datta in Bengaluru; Editing by Shinjini Ganguli
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