By Chavi Mehta
(Reuters) -Data analytics software maker Palantir Technologies (NYSE:PLTR) said on Monday it expects to turn a profit every quarter in 2023 weeks after launching its new artificial intelligence platform, sending its shares up about 28% in extended trading.
The company, known for its work with the U.S. Central Intelligence Agency, also beat first-quarter revenue expectations on bigger projects from existing commercial and government clients.
"Investors will be pleased not only with the better-than-expected results for the quarter, but also the guidance for profitability as well as the recent AI initiatives," said D.A. Davidson & Co analyst Gil Luria.
Palantir's new generative AI platform works on the same technology that's behind ChatGPT.
The interest in the new offering has been "unlike anything we have seen", CEO Alexander Karp said in a letter to shareholders, adding the AI platform can assist militaries in targeting enemies.
The first iteration of the platform will be made available to some customers this month.
The customers include "one of the largest insurance companies in the world" and supply chain and security customers, Chief Revenue Officer Ryan Taylor told Reuters.
Still, Palantir does not expect the platform to start driving revenue right away. Finance chief David Glazer said the company is trying to draw in more customers.
The company forecast second-quarter revenue in the range of $528 million and $532 million, below estimates of $536.2 million, per Refinitiv data. Its full-year revenue forecast, however, was largely in line with estimates.
Palantir continues to tighten its cloud spending and is investing in focus areas like AI, said Glazer. In February, it said it would cut 2% of its workforce.
First-quarter revenue rose 18% to $525.2 million, above analysts' average estimate of $505.6 million, as commercial revenue saw better growth than expected, said RBC (TSX:RY) Capital Markets analyst Rishi Jaluria. .
Palantir remains bullish on demand for its offerings in the United States, but faced challenges in "certain areas" internationally, Taylor said, without elaborating.