Palantir Technologies expects 2023 to be first profitable year after cost deductions

• Palantir Technologies expects 2023 to be its first profitable year.
• Revenue increased 18% to $509 million in the fourth quarter.
• It declared its first quarterly net income attributable to common shareholders of $30.9 million.

The developer of data analytics software Palantir Technologies said it expects 2023 to be its first profitable year as it reaps the benefits of cost reductions and the growth in artificial intelligence, driving its shares up about 10% in after-hours trade.

In recent months, the company has slashed employee stock-based pay and curtailed cloud investment in reaction to decreased spending from recession-averse businesses, according to finance chief David Glazer, who spoke to Reuters on Monday.

The declining demand had an impact on its 2023 revenue prediction, which, according to Refinitiv, was between $2.18 billion and $2.23 billion, less than the $2.29 billion analysts had predicted.

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Due to the market for American stock listings being severely affected by economic uncertainties, Palantir’s revenue from newly public companies that use its services has been hammered particularly hard. In comparison to a year ago, that revenue is anticipated to drop by almost half in the first quarter, to $16 million.

Nevertheless, company officials echoed statements made by Big Tech corporations and stated the AI boom brought on by the growth of ChatGPT was proving to be a positive development and will benefit their business in 2023.

“There are many different ways we can integrate with technologies like ChatGPT and apply those technologies to our customer’s data,” said Chief Revenue Officer Ryan Taylor.

Revenue for the business increased 18% to $509 million in the fourth quarter, above analysts’ predictions for the time when it won contracts with the UK military and US defense contractor Lockheed Martin Corp.

Following Russia’s conflict with Ukraine, Palantir, a company best known for its work with the US Central Intelligence Agency, has secured new contracts in the defense sector. Palantir sells software that allows businesses to see an army’s positions and to check their supply chains or cut expenses.

In the three months from October to December, it declared its first quarterly net income attributable to common shareholders of $30.9 million, or 1 cent per share, as opposed to a net loss of $156.2 million, or 8 cents per share, in the same time last year.

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