Palantir Technologies PLTR · USD

Segment and Geographic Information The following reporting segment tables reflect the results of the Company’s reportable operating segments consistent with the manner in which the CODM evaluates the performance of each segment and allocates the Company’s resources. The CODM does not evaluate the performance of the Company’s assets on a segment basis for internal management reporting and, therefore, such information is not presented. Contribution is used, in part, to evaluate the performance of, and allocate resources to, each of the segments, primarily by monitoring actual results versus historical periods. A segment’s contribution is calculated as segment revenue less the related costs of revenue and sales and marketing expenses. It excludes certain operating expenses that are not allocated to segments because they are separately managed at the consolidated corporate level, or are noncash costs. These unallocated and noncash costs include stock-based compensation expense, research and development expenses, and general and administrative expenses. Financial information for each reportable segment was as follows (in thousands, except percentages):Years Ended December 31,202520242023Amount%Amount%Amount%Contribution:Government revenue$2,402,287 $1,569,605 $1,222,215 Expenses attributable to government segment(826,217)(621,165)(497,245)Government contribution1,576,070 66 %948,440 60 %724,970 59 %Commercial revenue2,073,159 1,295,902 1,002,797 Expenses attributable to commercial segment(706,532)(524,394)(482,212)Commercial contribution1,366,627 66 %771,508 60 %520,585 52 %Total contribution$2,942,697 66 %$1,719,948 60 %$1,245,555 56 %The reconciliation of total contribution to income from operations is as follows (in thousands):Years Ended December 31,202520242023Income from operations$1,414,015 $310,403 $119,966 Research and development expenses (1)420,838 342,813 306,560 General and administrative expenses (1)423,811 375,094 343,126 Total stock-based compensation expense684,033 691,638 475,903 Total contribution$2,942,697 $1,719,948 $1,245,555 ————— (1) Excludes stock-based compensation expense.Geographic InformationRevenue by geography is based on the customer’s headquarters or agency location at the time of sale.

Commitments and ContingenciesPurchase CommitmentsThe Company has commitments with various third parties to purchase cloud hosting services. Under one of its third-party cloud services agreements, as amended, the Company has committed to spend at least $1.95 billion over ten contract years through September 30, 2033, among other things. As of December 31, 2025, the Company satisfied $79.2 million of its $170.2 million commitment for the contract year beginning October 1, 2025 and ending September 30, 2026.Litigation and Legal ProceedingsThe Company has been, is currently party to, and may, from time to time, be subject to various legal proceedings, claims, disputes, government investigations, or similar matters arising in the normal course of business. These may include proceedings, claims, disputes, allegations, or investigations related to, but not limited to, intellectual property; employment; securities; investors; taxes; class actions; contract or breach of contract; tort; warranty; refund; breach, leak, or misuse of personal data or confidential information; government procurement; government regulation or compliance; or other matters. The Company evaluates associated developments on a regular basis and establishes an accrual for loss contingencies when the loss is both probable and reasonably estimable.On September 15, 2022, October 25, 2022, and November 4, 2022, putative securities class action complaints were filed in the United States District Court for the District of Colorado, captioned Cupat v. Palantir Technologies Inc., et al., Case No. 1:22-cv-02384, Allegheny County Employees’ Retirement System v. Palantir Technologies, Inc., et al., Case No. 1:22-cv-02805, and Shijun Liu, Individually and as Trustee of the Liu Family Trust 2019 v. Palantir Technologies Inc., et al., Case No. 1:22-cv-02893, respectively, naming the Company and certain current and former officers and directors as defendants. The suits allege false and misleading statements about our business and prospects, and purport to allege claims under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Securities Act of 1933, as amended (the “Securities Act”), and seek unspecified damages and remedies under Sections 10(b), 20(a), and 20(A) of the Exchange Act and Sections 11 and 15 of the Securities Act. These three actions subsequently were consolidated as Cupat v. Palantir Technologies Inc., et al., Lead Civil Action No.

Debt 2014 Credit FacilityThe Company has a secured revolving credit facility, which provides for aggregate revolving commitments of $500.0 million and has a maturity date of March 31, 2027 (as amended, the “2014 Credit Facility”). As of December 31, 2025, the Company had no outstanding debt balances under the 2014 Credit Facility. The 2014 Credit Facility contains customary representations and warranties, and certain financial and nonfinancial covenants, including but not limited to maintaining minimum liquidity of $50.0 million, and certain limitations on liens and indebtedness. The Company was in compliance with all covenants associated with the 2014 Credit Facility as of December 31, 2025.

TaxesThe Company adopted ASU 2023-09, Income Taxes – Improvements to Income Tax Disclosures, for the annual disclosures for the year ended December 31, 2025 on a prospective basis. Comparative financial information for prior periods has not been restated and continues to be reported under the accounting standards in effect for those periods. Income before provision for income taxes consisted of the following (in thousands):Years Ended December 31,202520242023United States$1,584,577 $426,944 $174,637 Foreign72,791 62,229 62,454 Income before provision for income taxes$1,657,368 $489,173 $237,091 Provision for income taxes consisted of the following (in thousands):Years Ended December 31,202520242023Current:Federal$— $— $— State1,537 1,556 2,333 Foreign25,101 20,265 22,189 Total current provision26,638 21,821 24,522 Deferred:Federal— — — State— — — Foreign(3,914)(566)(4,806)Total deferred provision(3,914)(566)(4,806)Total provision for income taxes$22,724 $21,255 $19,716 A reconciliation of the expected tax provision at the statutory federal income tax rate to the Company’s recorded tax provision consisted of the following, subsequent to the adoption of ASU 2023-09 (in thousands, except percentages):Year EndedDecember 31, 2025AmountPercentU.S. federal tax at statutory rate$348,047 21.0 %State and local income taxes, net of federal income tax effect(1)1,537 0.1 Foreign tax effects:United Kingdom (“U.K.”):Statutory tax rate difference between the U.K. and U.S. (29,130)(1.8)Stock-based compensation expense(159,108)(9.6)Changes in valuation allowance184,024 11.1 Other(3,279)(0.2)Other foreign jurisdictions8,637 0.5 Effects of changes in tax laws or rates enacted in the current period— — Effects of cross-border tax laws— — Tax credits(151,602)(9.1)Changes in valuation allowances467,493 28.1 Nontaxable or nondeductible items: Stock-based compensation expense(720,691)(43.4)Nondeductible officers' compensation34,453 2.1 Other4,442 0.3 Changes in unrecognized tax benefits37,901 2.3 Total provision for income taxes and effective tax rate$22,724 1.4 %————(1) State taxes in Maryland made up the majority of the tax effect in this category.A reconciliation of the expected tax provision at the statutory federal income tax rate to the Company’s recorded tax provision consisted of the following, prior to the adoption of ASU 2023-09 (in thousands):Years Ended December 31,20242023Expected tax provision at U.S.

Stock-Based Compensation2020 Executive Equity Incentive PlanIn August 2020, the Company’s Board of Directors approved the 2020 Executive Equity Incentive Plan (the “Executive Equity Plan”). The Executive Equity Plan permitted the granting of nonstatutory stock options (“NSOs”) and RSUs to the Company’s employees, consultants, and directors. A total of 165,900,000 shares of the Company’s Class B common stock were reserved for issuance under the Executive Equity Plan. During August 2020, options to purchase 162,000,000 shares of Class B common stock and restricted stock units covering 3,900,000 shares of the Company’s Class B common stock were granted to certain officers.The Executive Equity Plan was terminated prior to the Company’s Direct Listing, and no additional awards will be granted under the Executive Equity Plan. However, the Executive Equity Plan will continue to govern the terms and conditions of the outstanding awards previously granted under the Executive Equity Plan. 2020 Equity Incentive Plan In September 2020, prior to the Direct Listing, the Company’s Board of Directors approved the 2020 Equity Incentive Plan (“2020 Plan”). The 2020 Plan provides for the grant of incentive stock options (“ISOs”), NSOs, restricted stock, RSUs, SARs, and performance awards to the Company’s employees, directors, and consultants. A total of 150,000,000 shares of the Company’s Class A common stock were initially reserved for issuance pursuant to the 2020 Plan. In addition, the number of shares of Class A common stock reserved for issuance under the 2020 Plan includes certain shares of common stock subject to awards under the 2010 Equity Incentive Plan (“2010 Plan”) and Executive Equity Plan in the case of certain occurrences, such as expirations, terminations, exercise and tax-related withholding, or failures to vest. Shares of Class B common stock added to the 2020 Plan from the 2010 Plan or Executive Equity Plan are reserved for issuance under the Company’s 2020 Plan as Class A common stock. The number of shares of Class A common stock available for issuance under the 2020 Plan will also include an annual increase on the first day of each fiscal year beginning on January 1, 2022, equal to the least of:•250,000,000 shares of the Company’s Class A common stock;•Five percent of the outstanding shares of the Company’s common stock as of the last day of the immediately preceding fiscal year; or•such other amount as the administrator of the 2020 Plan determines.

LeasesThe Company has operating leases primarily for corporate office space. Certain lease agreements contain renewal options, rent abatement, and escalation clauses that are factored into our determination of lease payments when appropriate. The Company's leases have remaining terms up to March 2035, some of which include one or more options to extend. Additionally, some lease contracts include termination options.Supplemental balance sheet information related to lease liabilities at December 31, 2025 and 2024 was as follows (in thousands):As of December 31,Lease-Related Assets and LiabilitiesFinancial Statement Line Items20252024Right-of-use assets:Operating leasesOperating lease right-of-use assets$200,105 $200,740 Total right-of-use assets$200,105 $200,740 Lease liabilities:Operating leasesOperating lease liabilities$45,864 $43,993 Operating lease liabilities, noncurrent183,474 195,226 Total lease liabilities$229,338 $239,219 The components of lease expense included in the Company's consolidated statements of operations include (in thousands):Years Ended December 31,202520242023Operating lease expense$57,164 $57,655 $61,972 Short-term lease expense4,461 3,445 4,949 Variable lease expense5,636 5,585 4,772 Sublease income(15,966)(17,205)(18,905)Total lease expense, net$51,295 $49,480 $52,788 Variable lease costs are primarily related to payments made to lessors for common area maintenance, property taxes, insurance, and other operating expenses. Short-term lease costs primarily represent temporary employee housing. Maturities of operating lease liabilities as of December 31, 2025 were as follows (in thousands):As of December 31, 2025Operating Lease CommitmentsLess: Sublease IncomeNet Lease CommitmentsYear ended December 31,2026$62,079 $13,786 $48,293 202750,428 14,423 36,005 202829,555 12,470 17,085 202924,943 10,254 14,689 203033,319 10,254 23,065 Thereafter92,215 10,254 81,961 Total undiscounted liabilities292,539 71,441 221,098 Less: Imputed interest(63,201)— (63,201)Total operating lease liabilities$229,338 $71,441 $157,897 The weighted-average remaining lease term related to the Company’s operating lease liabilities as of December 31, 2025 and 2024 was six and seven years, respectively. The weighted-average discount rate related to the Company’s operating lease liabilities as of December 31, 2025 and 2024 was 7%.

Risk Management and StrategyWe maintain a security organization that is responsible for overseeing security practices across the Company, including with respect to information, personnel, and facilities. Our information security team maintains policies and processes for assessing, identifying, and managing material risk from cybersecurity and other information security threats, including as may be related to our third party vendors and suppliers. Our Chief Information Security Officer leads our information security team and works with Palantir’s other departments in areas such as facilities, physical security, operations, data protection, information technology, product development, finance, legal and compliance, where necessary in assessing and reviewing risks and identifying actions to be taken. As part of our overall approach to risk management, we monitor and evaluate the sufficiency of our policies, processes and controls, including with respect to cybersecurity risks and process. Regular assessments and reviews, both internal and independent, are conducted on Palantir information assets and networks, including systems, devices, applications, and related computing resources, to evaluate potential risks and vulnerabilities, identify actions to be taken, and evaluate the effectiveness of our cybersecurity program and controls. Risk management exercises occur regularly, and in response to changes in Company operations, risk landscape, and threat actor activities using threat modeling, risk forecasting, and other techniques to identify where investments in security should be made. Internal assessments occur based on results from risk management exercises, changes in infrastructure, cybersecurity risks, threat actor activity, and in response to other internal or external events. External assessments are conducted by independent assessors, consultants, or auditors, as relevant, and occur regularly in order to maintain our certifications and accreditations with certain compliance regimes (for example, FedRAMP).We also provide employees with policies and training in areas such as ethics, corruption, information security, social engineering, data protection, and compliance, and with regular updates on the cybersecurity program and potential threats.

9. Stockholders’ EquityThe Company’s Class A, Class B, and Class F common stock (collectively, the “common stock”) all have the same rights, except with respect to voting and conversion rights. Class A and Class B common stock have voting rights of 1 and 10 votes per share, respectively. The Class F common stock has the voting rights generally described herein and each share of Class F common stock is convertible at any time, at the option of the holder thereof, into one share of Class B common stock. All shares of Class F common stock are held in a voting trust established by Stephen Cohen, Alexander Karp, and Peter Thiel (the “Founders”). The Class F common stock generally gives the Founders the ability to control up to 49.999999% of the total voting power of the Company’s capital stock, so long as the Founders and certain of their affiliates collectively meet a minimum ownership threshold, which was 100.0 million of the Company's equity securities as of December 31, 2025.Holders of the common stock are entitled to dividends when, as, and if declared by the Company’s Board of Directors, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends. No dividends have been declared as of December 31, 2025.The following represented the total authorized, issued, and outstanding shares for each class of common stock (in thousands):As of December 31, 2025As of December 31, 2024AuthorizedIssued and OutstandingAuthorizedIssued and OutstandingClass A Common Stock20,000,000 2,290,987 20,000,000 2,242,389 Class B Common Stock2,700,000 99,200 2,700,000 95,401 Class F Common Stock1,005 1,005 1,005 1,005 Total22,701,005 2,391,192 22,701,005 2,338,795 Share Repurchase ProgramIn August 2023, the Company’s Board of Directors authorized a stock repurchase program of up to $1.0 billion of the Company’s outstanding shares of Class A common stock (the “Share Repurchase Program”). Share repurchases were recorded on the trade date and the repurchase price is inclusive of any related fees and commissions. Shares of Class A common stock repurchased by the Company were immediately retired, and upon retirement the par value of the Class A common stock repurchased was deducted from common stock with the excess of repurchase price recorded to additional paid-in capital on the Company’s consolidated balance sheets.During the year ended December 31, 2025, the Company repurchased and subsequently retired 0.