Good afternoon. I'm Ana Soro from Palantir's Finance Team, and I'd like to welcome you to our Fourth Quarter 2023 Earnings Call. We'll be discussing the results announced in our press release issued after the market close and posted on our Investor Relations website. During the call, we will make statements regarding our business that may be considered forward looking within applicable securities laws, including statements regarding our first quarter and fiscal 2024 results, management's expectations for our future financial and operational performance, and other statements regarding our plans, prospects, and expectations. These statements are not promises or guarantees and are subject to risks and uncertainties, which could cause them to differ materially from actual results. Information concerning those risks is available in our earnings press release, distributed after the market closed today, and in our SEC filings. We undertake no obligation to update forward-looking statements except as required by law. Further, during the course of today's call, we will refer to certain adjusted financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, GAAP measures. Additional information about these non-GAAP measures, including reconciliation of non-GAAP to comparable GAAP measures, is included in our press release and investor presentation provided today. Our press release, investor presentation and SEC filings are available on our Investor Relations website at investors.palantir.com. Over the course of the call, we will refer to various growth rates when discussing our business. These rates reflect year-over-year comparisons, unless otherwise stated. Joining me on today's call are Alex Karp, Chief Executive Officer; Shyam Sankar, Chief Technology Officer; Dave Glazer, Chief Financial Officer; and Ryan Taylor, Chief Revenue Officer and Chief Legal Officer. I'll now turn it over to Ryan to start the call.

2023 was a tremendous year of opportunity and growth for our company, with US commercial at the forefront, which was meaningfully driven by AIP as the product and bootcamps as the go-to-market motion. We closed out the year with $608 million in fourth quarter revenue, representing 20% year-over-year and 9% sequential growth. Our commercial business surpassed $1 billion in revenue over the last 12 months, a noteworthy milestone. And our fourth quarter commercial revenue grew 32% year-over-year. AIP and bootcamps are accelerating our business, particularly in US commercial, where fourth quarter revenue grew 70% year-over-year, evidencing a significantly expanding addressable market. In October, we set a goal of executing 500 AIP bootcamps within one year. We have already blown that goal out of the water, having completed more than 560 bootcamps across 465 organizations to-date. We are deploying AIP to implement hundreds of real tangible use cases in production for our customers. One bootcamp attendee remarked, "What your team did in just two days was incredible. We can already think of 100 use cases for this." While another said, "It seems there are endless solutions. It seems there's nothing Palantir cannot do." When combining LLMs with Foundry through AIP, the ability to deploy use cases becomes much more widely accessible, so the addressable market expands considerably. We're seeing initial momentum as a result of that expansion, while also still being at the starting line in the journey to capture that market. In our US commercial business, the expanding addressable market, driven by AIP, is propelling growth both through new customer acquisitions and expansions with existing customers. I've never before seen the level of customer enthusiasm and demand that we are currently seeing from AIP in US commercial. With regard to new customer acquisition, the expanding addressable market is reflected in…

Thanks, Ryan. As Ryan mentioned, the expanding addressable market, driven by AIP, is propelling growth both through new customer acquisitions and expansions with existing customers. We continue to focus on accelerating the rate of bootcamps with current and prospective customers. From customer feedback, the AI platform meets this moment like none other. AI has radically recalibrated customer expectations for software. Expectations at AIP and Foundry exceed by enabling the elegant integration of humans, software, and AI to deliver operational outcomes quickly. We are focused on the end-to-end problem of value creation, not a small narrow technical slice. Accordingly, our platforms focus on tools, not tuning on transforming business processes, not seeking iotas of insight. AIP is the AI-powered operating system for the enterprise, not a Q&A bot, not an agent framework, not a way to dabble, but a way to deliver. At a recent two-day bootcamp with the construction, engineering and architecture company, our customer developed a production-ready use case that provided $10 million of savings. They used AIP to build an AI-powered disruption manager application that processes production disruption notifications through AIP Logic to determine what the best new production plan would be. AIP, wielding a linear optimizer as a tool, and using LLMs to parameterize and contextualize the disruption, translates the notification to a clear understanding of impact on the optimized schedule. AIP Logic and AIP Automate then rerun the optimizer to generate opportunities to respond to disruption, two days, $10 million. We have covered nearly 200 use cases coming out of all these bootcamps, and we are just getting started. The core theory of value that has driven our product strategy for time eternal is data integration, that bringing new data into an operationally-relevant context to expand the complexity, nuance and surface area of decision making always…

Thanks, Shyam. We had an exceptionally strong fourth quarter, marked by our outperformance across revenue, profitability and cash flow. Revenue growth accelerated to 20% year-over-year in Q4 on the back of our US commercial business, which alone grew 70% year-over-year, a result driven by our momentum in AIP. Adjusted operating margin continued to expand to 34% in the fourth quarter, highlighting the strong unit economics of our business. We beat the high end of our guidance range on both revenue and adjusted operating margin, driving an 800 basis point sequential increase to our Rule of 40 score, from 46% in the third quarter to 54% in the fourth quarter. We also delivered our fifth consecutive quarter of GAAP profitability. In 2023, we generated $210 million of GAAP net income, a $584 million increase from 2022. In the fourth quarter alone, we generated nearly $100 million in GAAP net income. We also delivered our fourth consecutive quarter of GAAP operating profit, generating a $120 million of GAAP operating income in 2023, a $281 million increase year-over-year. Our GAAP operating profit accelerated in each quarter of last year. And in the fourth quarter alone, GAAP operating income increased 65% sequentially to $66 million, our highest quarter ever of GAAP operating income. We generated over $300 million in adjusted free cash flow in the fourth quarter, representing a margin of 50% and over $730 million of adjusted free cash flow for the full year. Turning to our global top-line results. Fourth quarter revenue accelerated to $608 million, up 20% year-over-year and 9% sequentially. We generated $2.23 billion of revenue in 2023, representing a growth rate of 17% year-over-year. We generated $1.38 billion in total US revenue in 2023, representing a growth rate of 19% year-over-year. Excluding the impact of revenue from strategic commercial…

Welcome to our earnings. There's really so much to say. Obviously, our performance in US commercial is extraordinary, some would say bombastic. The numbers that just fly off the screen are the 70% year-on-year growth in Q4. The number numbers that I almost had to turn the page when I saw them were the -- over 100 contracts, over $1 million, 37 over $5 million, and 21, roughly, over $10 million. There is -- it's almost inconceivable to do that many contracts given the way our product used to be. And so, what you see is a convergence of our product being easier to use, an augmentation of its charisma, both driven by developments in AI, large language models, which make the product approachable foundry to the broader market. You also see just this enormous demand and our ability to meet that demand with a pilot -- new piloting approach that we call bootcamp. So, we went, like -- two years ago, we did 92 pilots. And last year, really mostly the second half of the year, we did over 500 bootcamps. I go around the country now telling CEOs, CTOs, and really, whoever has $1 million to buy our product and transform their enterprise, take everything you've done in AI since you started, put your best people on it, and we're going to show up at any time you want, and we're going to run your data at a bootcamp for 10 hours. And then, you compare your self-pleasuring to our operationally-relevant, commercially-valuable, critical-to-your-enterprise results. Our 10 hours, your 10 months. Any products you want, any vendor you want, any hyperscaler you want, you pick them, we'll show up. The reaction to this because every -- what America obviously realize is this is real. But if you took the…

With that, we'll begin with a few questions from our shareholders before we open up the call. Our first question is from Andrew. Given the significant increase in demand for AIP, could the management team elaborate on the advancements made in formulating monetization strategy for these offerings?

Yeah. You're right to comment. The demand is off the charts for AIP, with bootcamps as the delivery mechanism for AIP, and we're seeing AIP drive the expanding addressable market, that we're seeing. As Alex commented, we closed 103 deals in Q4 alone over $1 million. Having been involved in many of those directly and on the ground, I can tell you that the feeling, the demand, the excitement over AIP and over Palantir is unlike anything I've seen in the 14 years I've been here, and we feel that. We feel that in a tangible way on the ground with our customers, And we're starting to see the beginnings of that in our Q4 results. In October, we set the goal of executing 500 bootcamps for top of funnel for AIP. As noted, we've already exceeded that with over 560 bootcamps just about four months later, and that is only continuing to increase that momentum. Then, you see the results in US commercial, 70% year-over-year growth in revenue in Q4, 55% growth in customer count year-over-year, a 107% growth in TCV closed on an adjusted basis. And then, you see emerging from that the archetypes -- to the question on monetization, the archetypes of the types of monetization we're seeing. Either it's -- first, it's boot camps that are quickly converting to paying customers or it's expansion of existing customers or it's customers where maybe we've been engaged for a while and introduction of AIP, that whole process has been accelerated. We're seeing that across the board, and yet at the same time, we barely touched that addressable market, and we're really only at the beginning. So excited to see where that takes us.

Thanks, Ryan. Our next question is from Tanner who asks, what kind of interest has the FedStart program seen as of late? Has the market responded to this? And will there be additional marketing made towards these start-ups? And relatedly, when do you expect Apollo to be a significant contributor to Palantir's revenue?

Great. Thanks, Tanner. Yeah, FedStart has been a hit. And I think it's easy to understand why. There's been $100 billion of capital that's flowed into the defense tech community at large. No one can afford the two years and $2 million it takes to achieve this accreditation. This provides market access. We've started with an intense focus on IL5, bringing folks to the DoD market. We plan to release an IL6 FedStart at the end of Q2 and FedRAMP High at the end of Q3, early Q4. And we're also going to be taking this to our allies. So, we intend to launch FedStart with the UK on the secret network and above top secret network later this year. Apollo is having its moment. I think the charisma it has with customers when they see it running at scale, running, managing all $2.2 billion of our revenue, I think a big part of this is they've spent the last two years trying to solve these problems on their own. And then, this really understand how much value it can contribute to them, how much can accelerate them, both on the government program side, but also on the company side, where companies are struggling with how to efficiently deliver modern software into these environments. But I think the bigger thing that I'm really excited about is Mission Manager, which is Apollo Rubix, which is our Zero Trust compute and networking infrastructure and the ontology software development kit, the OSDK as a combined offering to the government to really give the government what they've been asking for, which is infrastructure that allows them to build and manage multi-vendor big tent ecosystems that drive continuous competition and allow the government to actually control the interfaces and avoid lock-in. And so, you can think of FedStart as actually the first product that we've launched on top of Mission Manager infrastructure. We've started doing other projects, including Army C2 work, but that's going to be a very exciting trend for us.

Let me just give an addendum here. Shyam launched and built FedStart. But one of the most important things it did is before we launched FedStart, the $100 billion of investment in kind of new defense tech, largely at the impression Palantir was competitive with them. And we weren't competitive with them. And FedStart aligns all those venture capitalists and all their investments in most of their companies with Palantir because we can allow them to get on to classified networks much quicker so that they can actually show results to their investors much quicker. And that means a lot of the resistance to us is not only disappearing, but it's going -- it's actually been converted into support for Palantir, support for what we're doing. And those people are really helping spread the obvious Palantir gospel instead of wondering how they can compete with us, they're wondering how we can succeed together.

Thank you, both. Our next question is from Keith. Is your greatest competitor still your potential customers' own IT department, or has that changed?

Thanks, Keith. We certainly used to feel that way. But when you look at bootcamps, you look at how much charisma AIP has with IT and the fact that we're winning with IT with Apollo, with the OSDK, with capabilities like Marketplace, that's certainly not the case anymore. IT has become some of our biggest champions. And I think what that's revealed for us is that perhaps the issue was never actually IT. It was this software industrial complex. Everything Alex was talking about earlier, these thin products that were really designed to sell and they're more like a drug than they are like medicine, and the sort of strict adherence to architectural conformity. But what I think is exciting about GenAI is it's blown up all of that. It's been a big reset button here. The whole map, the whole architecture is up for grabs, and we're working very closely with IT to write that map, to write the architecture that is actually delivering all these operational use cases for these customers.

Yeah, one of the coolest things about going to these meetings is it used to be three, four years ago, you could predict who was going to like us and who wasn't, and it's just not anymore. You go to these meetings and they'll often be the IT person telling CEO, like, look, we have no choice. We got to -- we need to install this quickly. And so, there's a cultural shift in the US. I don't think it's outside the US is the case. But inside the US, people in IT are responsible for business value. This creates business value. And they're often responsible for global business value. They're not that interested in putting together a PowerPoint and showing how that could work in theory. They've got to show themselves, their company, their workers, the whole -- that they're going to get actual revenue either driving or quality of revenue driving results quickly. And they are almost exclusively now our friends. Maybe they can talk to some analysts. We can convert you guys, too.

Thanks. Our next question is from Mariana with Bank of America. Mariana, can you please turn on your camera, and then you'll receive a prompt to unmute your line.

Good afternoon, everyone. So, I have two questions, one in US government and the second one today on financials. So, the first one is this. You mentioned in your prepared remarks, we're accelerating US government growth and opportunities across the board. But this is contrasting to what we have heard from the primes this quarter. They have agreed that more things are moving towards software, but they argue that the DoD has to figure out how to buy software, and they have to figure out how to sell software. From your point of view, how large is the change that is netted in this award approach, but also how large is the advantage that Palantir has in this environment where you have been selling software for a long time now?

Yeah. Look, we've been doing this for two decades as you point out, and I think that gives us a perspective of what was it like two decades ago and what is it like now. And it's wildly different and so much has changed. Now, I don't want to underestimate how much has to continue changing. And I think the department recognizes that and is working on that, but to not acknowledge the progress, I think, would be disingenuous here. Unlike the primes, who use to focus on hardware and now responding to software, we've always focused on software. And one of the things about software is it evolves incredibly quickly. If you think about the software we were deploying to do the Afghan non-combatant evacuation operations and how much that evolved moving into Ukraine, how much that evolved moving into the current crisis in CENTCOM, it is evolving faster than procurement can procure it. And I think one of the unique strengths that we have is that we are investing and mutating and managing the software independent of the actual procurement actions. And that means that we always have software that’s so far in the future that it will meet the moment that the DoD actually has.

As an addendum to that, the core thesis of this -- of Palantir was always the reality of a disjointed violent world forces pareto-optimal conditions on institutions. So, I believe that everyone knows we have the best software in the world. It may not matter in a non-dangerous environment. But it did matter in Ukraine and Israel, and who did they buy? It does matter our software is running in -- I never know what do I say, but in among the most critical places in the DoD, if you -- if we are forced to fight a three-pronged war, you cannot do that even from a perspective of keeping ammunitions ready without accurate software. So the more dangerous, the more real it gets, the more battle-tested and real your software has to be. I believe it's about to get very real. Why? Because our GDP growth is significantly better than China's. Now, I know the always wrong crowd says, We then should get peace. But I'm telling you that the rational result -- or the rational consequences of that is our adversaries are like America is going to be stronger tomorrow than today. So, like, they don't have a GDP story because they cannot -- they do not build these systems as well as we do. They do not have the tech community we do and they do not have the US market like we do. Look at our results. And so, as this becomes more and more dangerous every company in the world, whether they're small, big, whether they're a start-up, whether they're one of the largest primes, whether us, is going to have to actually prove their software works on the battlefield. We love that. We want to prove -- and we welcome and relish proving environments. If it was up to me, software would only be deployed at America and Western allies if it was proven on the battlefield. Unfortunately, for us, our adversaries are going to force that kind of adjudication. And how do we -- and for those of you who can't evaluate that because you don't have access to our software in the battlefield, though you could read the news and see what Israel has done and what Ukraine has done, look what's happening in US commercial. You have a completely rational environment where we're deploying and growing the way we're growing with almost no sales force. And it's because it really matters. And when it really matters, the fact that they may not like my jokes or my habits, it will protect your life. And that's why we're going to do well.

Thank you, Alex. Our next question is from Dan with Wedbush. Dan, please turn on your camera and then you'll receive a prompt to unmute your line.

Thank you. So, I think, inconceivable the right word in terms of everything that you produced this quarter. My question would be, are you starting to actually see an acceleration in terms of AIP customer engagement, not even just from Q4, but even starting 2024?

Do you want to handle that as the man on the front line?

Yeah. I mean the answer is yes, absolutely. And I think we're still very early, obviously, with AIP and the rollout and very early in the market. But as far as what we're seeing from customers you see -- I mean just see like kind of Q3 to Q4 results and then what we're seeing in the conversations we're having with customers, the way that it's being adopted by the business, as Alex talked about, in the conversations we're having with customers, we're seeing that acceleration, and we expect that to continue.

Also, just like we do these AIP conferences, I think we invited you and your team, we can't do enough of them. We're telling -- we're limiting the number of people who can come. It's like a rock concert. It's like, yeah, yeah, if you know somebody, we can get you backstage. By the way, for those of you who are evaluating our company, we are going to invite all of you to our bootcamps. Please use as you did, but like take a look at the software. It's like we are not arguing in the abstract or in a PowerPoint or according to what you may have learned at business school that is better, we are arguing that it is better. And there's no other way to show that, but to do it. But to your question, yeah, like, we're already overfilled for our AIP bootcamp. And it's just we don't know how to deal actually with this demand. And so, we're rebuilding the company. And we have a lot of employees in Germany and France. I'm telling them it's time to pack up and come to America. I'm telling our hiring, we are hiring here. We are having, as I mentioned, a bonanza of people wanting to work here because people are quite frankly tired of working for people who seemingly only have an opinion when it doesn't matter and with products that may not work. We're looking at -- I'm getting personally involved in the recruiting again to get more people, but exactly the right people, and we're going to scale against the demand. But it's a real thing.

Thank you. Alex, as usual, we have a lot of our shareholders on the line. Is there anything you'd like to say before we end the call?

I mean, we are fighting for the West and its allies to be stronger. And we -- I very much appreciate your support. At this company, we think about our investors. Our most important investors are at Palantir, our second most important investors are people investing their own money. And we relish your support, and it gives us a lot of motivation. I meet individual investors every time I go to a customer basically. And I've had individual investors, I've met at 2:00 a.m., 3:00 a.m. on a VTC, and I asked them, "Well, why are you working at 3:00 a.m. to make your enterprise better in AIP or Foundry?" And they basically all say the same thing, because Palantir is fighting for my rights and my liberty. And we are fighting for your rights and your liberty and we are going to continue to fight for that the way we do that, which is by delivering the best products to our allies by hurting our adversaries and by giving US commercial the strength it needs to massively outperform every other country in the world. So, thank you.

Thanks, Alex. That concludes Q&A for today's call.