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Palantir forecast cut, surprise loss send shares down 15%

By Chavi Mehta

(Reuters) -Palantir Technologies Inc lowered its annual revenue forecast to below market estimates after the data analytics software company reported a surprise loss on Monday, sending its shares down 15% in trading before the bell.

The company had to temper its revenue forecast as the timing of some large government contracts remained uncertain, Palantir Chief Financial Officer David Glazer said.

"The size of these contracts, coupled with government procurement, is what makes it so unpredictable."

The Denver, Colorado-based company also forecast third-quarter revenue below analysts' estimates.

RBC Capital Markets analyst Rishi Jaluria said he was surprised by the weakness in non-U.S. government business, given the company's big push with European Union governments post Russia-Ukraine conflict.

Palantir was co-founded by billionaire entrepreneur Peter Thiel in 2003 to help with U.S. counter-terrorism operations, but has since diversified to commercial business, and now derives almost half its sales from the private sector

Commercial revenue grew 46%, with U.S. commercial revenue more than doubling in the second quarter.

The company's international business, which makes up roughly 40% of its sales, was hit by foreign exchange headwinds, Glazer said.

On an adjusted basis, the company lost 1 cent per share in the reported quarter, which was in part due to Palantir's investments in SPACs, according to Glazer. Analysts on average had expected a profit of 3 cents per share, according to Refinitiv data.

Quarterly revenue rose 26% to $473 million.

Palantir now expects total revenue for the full year between $1.900 billion and $1.902 billion as the base case, or a growth of about 23%, compared with the 30% or more growth forecast earlier. Analysts had expected revenue of $1.96 billion.

The company forecast third-quarter revenue between $474 million and $475 million, compared with estimates of $506.9 million.

(Reporting by Chavi Mehta in Bengaluru; Editing by Shounak Dasgupta and Vinay Dwivedi)
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