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What changed in Palantir Technologies's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Palantir Technologies's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+367 added−373 removedSource: 10-K (2026-02-17) vs 10-K (2025-02-18)

Top changes in Palantir Technologies's 2025 10-K

367 paragraphs added · 373 removed · 316 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

132 edited+19 added−20 removed310 unchanged
Biggest changeThese risks are described more fully below and include, but are not limited to, risks relating to the following: • until recent quarters, we had a history of incurring net losses, and we anticipate our operating expenses will continue to increase, and we may not be able to maintain profitability in the future; • we may not be able to sustain our revenue growth; • our sales efforts involve considerable time and expense and our sales cycle is often long and unpredictable; • a limited number of customers account for a substantial portion of our revenue; • our results of operations and our key business measures are likely to fluctuate significantly on a quarterly basis; • seasonality may cause fluctuations in our results of operations and financial position; • our platforms are complex and may have a lengthy implementation process; • we may not successfully develop and deploy new technologies (such as technologies incorporating AI) to address the needs of our customers; • our platforms must operate with third-party products and services; • we may be unable to hire, retain, train, and motivate qualified personnel and senior management and deploy our personnel and resources to meet customer demand; • we may be unable to successfully build, expand, and deploy our marketing and sales organization; • we may not be able to maintain and enhance our brand and reputation; • unfavorable news or social media coverage may harm our reputation and business; • exclusive arrangements or unique terms with customers or partners may result in significant risks or liabilities to us; • we face intense competition in our markets; • we may be unable to maintain or properly manage our culture as we grow; • we may not enter into relationships with potential customers if we consider their activities to be inconsistent with our organizational mission or values; • joint ventures, channel sales relationships, platform partnerships, and strategic alliances may be unsuccessful; • we may not be successful in executing our strategy to increase our sales to larger customers; • breach of the systems of any third parties upon which we rely, our customers’ systems, locations, or environments, or our internal systems or unauthorized access to data; • the market for our platforms and services may develop more slowly than we expect; • we have made and may continue to make strategic investments to support key business initiatives, including in privately-held and publicly-traded companies, as well as alternative investments, and we may not realize a return on these investments; • issues raised by the use of AI (including machine learning and large language models) in our platforms and business may result in reputational harm or liability; • we depend on computing infrastructure of third parties and they may experience errors, disruption, performance problems, or failure; 12 Table of Contents • we may fail to adequately obtain, maintain, protect, and enforce our intellectual property and other proprietary rights; • we may be subject to intellectual property rights claims; • there may be real or perceived errors, failures, defects, or bugs in our platforms; • we rely on the availability of third-party technology that may be difficult to replace or that may cause errors; • our business is subject to complex and evolving U.S. and non-U.S. laws and regulations regarding privacy, data protection and security, technology protection, and other matters; • our non-U.S. sales and operations subject us to additional risks and regulations; • we may encounter unfavorable outcomes in legal, regulatory, and administrative inquiries and proceedings; • we may fail to receive and maintain government contracts or there may be changes in the contracting or fiscal policies of the public sector; • many of our customer contracts may be terminated by the customer at any time for convenience and may contain other provisions permitting the customer to discontinue contract performance; • we may not realize the full deal value of our customer contracts; • there may be a decline in the U.S. and other government budgets, changes in spending or budgetary priorities, or delays in contract awards; • there are no guarantees that our Share Repurchase Program (as defined below) will result in increased shareholder value; and • the multi-class structure of our common stock, the Founder Voting Trust Agreement, and the Founder Voting Agreement concentrate voting power with certain stockholders, in particular, Stephen Cohen, Alexander Karp, and Peter Thiel (our “Founders”) and their affiliates.
Biggest changeThese risks are described more fully below and include, but are not limited to, risks relating to the following: • we may not be able to sustain our revenue growth; • our sales efforts involve considerable time and expense and our sales cycle is often long and unpredictable; • a limited number of customers account for a substantial portion of our revenue; • we may not realize the full deal value of our customer contracts; • we anticipate our operating expenses will continue to increase and we may not be able to maintain profitability in the future; • our results of operations and our key business measures are likely to fluctuate significantly on a quarterly basis; • seasonality may cause fluctuations in our results of operations and financial position; • we may not successfully develop and deploy new technologies (such as technologies incorporating AI) to address the needs of our customers; • we may not be able to maintain and enhance our brand and reputation; • our reputation and business may be harmed by news or social media coverage or other external scrutiny of Palantir or our leadership; • we may be unable to hire, retain, train, and motivate qualified personnel and senior management and deploy our personnel and resources to meet customer demand; • we may be unable to successfully build, expand, and deploy our marketing and sales organization; • our platforms are complex and may have a lengthy implementation process; • exclusive arrangements or unique terms with customers or partners may result in significant risks or liabilities to us; • we face intense competition in our markets; • our platforms must operate with third-party products and services; • the market for our platforms and services may develop more slowly than we expect; • we may be unable to maintain or properly manage our culture as we grow; • we may not enter into relationships with potential customers if we consider their activities to be inconsistent with our organizational mission or values; 12 Table of Contents • joint ventures, channel sales relationships, platform partnerships, and strategic alliances may be unsuccessful; • we may not be successful in executing our strategy to increase our sales to larger customers; • breach of the systems of any third parties upon which we rely, our customers’ systems, locations, or environments, or our internal systems or unauthorized access to data; • we have made and may continue to make strategic investments to support key business initiatives, including in privately-held and publicly-traded companies, as well as alternative investments, and we may not realize a return on these investments; • issues raised by the use of AI (including machine learning, large language, and other generative or agentic AI models and applications, and software functionality to operationalize the foregoing) in our platforms and business may result in reputational harm or liability; • we depend on computing infrastructure of third parties and they may experience errors, disruption, performance problems, or failure; • we may fail to adequately obtain, maintain, protect, and enforce our intellectual property and other proprietary rights; • we may be subject to intellectual property rights claims; • there may be real or perceived errors, failures, defects, or bugs in our platforms; • we rely on the availability of third-party technology that may be difficult to replace or that may cause errors; • our business is subject to complex and evolving U.S. and non-U.S. laws and regulations regarding privacy, data protection and security, technology protection, and other matters; • our non-U.S. sales and operations subject us to additional risks and regulations; • we may encounter unfavorable outcomes in legal, regulatory, and administrative inquiries and proceedings; • we may fail to receive and maintain government contracts or there may be changes in the contracting or fiscal policies of the public sector; • many of our customer contracts may be terminated by the customer at any time for convenience and may contain other provisions permitting the customer to discontinue contract performance; • there may be a decline in the U.S. and other government budgets, changes in spending or budgetary priorities, or delays in contract awards; and • the multi-class structure of our common stock, the Founder Voting Trust Agreement, and the Founder Voting Agreement concentrate voting power with certain stockholders, in particular, Stephen Cohen, Alexander Karp, and Peter Thiel (our “Founders”) and their affiliates.
For over a decade, Gotham has surfaced insights for global defense agencies, the intelligence community, disaster relief organizations and beyond. And Foundry is becoming a central operating system not only for individual institutions but also for entire industries.
For over a decade, Gotham has surfaced insights for global defense agencies, the intelligence community, disaster relief organizations and beyond. Foundry is becoming a central operating system not only for individual institutions but also for entire industries.
Implementing our platforms can be a complex and lengthy process since we often configure our existing platforms for a customer’s unique environment. Inability to meet the unique needs of our customers may result in customer dissatisfaction and/or damage to our reputation, which could materially harm our business.
Implementing our platforms can be a complex and lengthy process since we often configure our existing platforms for a customer’s unique environment. The inability to meet the unique needs of our customers may result in customer dissatisfaction and/or damage to our reputation, which could materially harm our business.
As our business has grown and as interest in Palantir and the technology industry overall has increased and we have engaged more actively with media and marketing efforts, we have attracted, and may continue to attract, significant attention from news and social media outlets, including unfavorable coverage and coverage that is not directly attributable to statements authorized by our leadership, that incorrectly reports on statements made by our leadership or employees and the nature of our work, perpetuates unfounded speculation about company involvements, or that is otherwise misleading.
As our business has grown and as interest in Palantir and the technology industry overall has increased and we have engaged more actively with media and marketing efforts, we have attracted, and may continue to attract, significant attention from news and social media outlets, including unfavorable coverage and coverage that is not directly attributable to statements authorized by our leadership, that incorrectly reports on statements made by our leadership or employees and the nature of our work, that perpetuates unfounded speculation about company involvements, or that is otherwise misleading.
If our customers are not able or willing to accept our product-based business model, instead of a labor-based business model, our business and results of operations could be negatively impacted. Our platforms are generally offered on a productized basis to minimize our customers’ overall cost of acquisition, maintenance, and deployment time of our platforms.
If our customers are not able or willing to accept our product-based business model, instead of a labor-based business model, our business and results of operations could be negatively impacted. Our platforms are generally offered on a productized basis to minimize our customers’ overall cost of acquisition, maintenance, and deployment time.
Our new and existing platforms and changes to our existing platforms could fail to attain sufficient market acceptance for many reasons, including: • our failure to predict market demand accurately in terms of product functionality and to supply offerings that meet this demand in a timely fashion; • product defects, errors, or failures or our inability to satisfy customer service level requirements; • negative publicity or negative private statements about the security, performance, or effectiveness of our platforms or product enhancements; • delays in releasing to the market our new offerings or enhancements to our existing offerings, including new product modules; • introduction or anticipated introduction of competing platforms or functionalities by our competitors; • inability of our platforms or product enhancements to scale and perform to meet customer demands or needs; 18 Table of Contents • receiving qualified or adverse opinions in connection with security or penetration testing, certifications or audits, such as those related to IT controls and security standards and frameworks or compliance; • poor business conditions for our customers, causing them to delay software purchases; • reluctance of customers to purchase proprietary software products; • reluctance of our customers to purchase products hosted by our vendors and/or service interruption from such providers; • reluctance of customers to purchase products incorporating generative AI; and • reluctance of customers to purchase products incorporating open source software.
Our new and existing platforms and changes to our existing platforms could fail to attain sufficient market acceptance for many reasons, including: • our failure to predict market demand accurately in terms of product functionality and to supply offerings that meet this demand in a timely fashion; • product defects, errors, or failures or our inability to satisfy customer service level requirements; 18 Table of Contents • negative publicity or negative private statements about the security, performance, or effectiveness of our platforms or product enhancements; • delays in releasing to the market our new offerings or enhancements to our existing offerings, including new product modules; • introduction or anticipated introduction of competing platforms or functionalities by our competitors; • inability of our platforms or product enhancements to scale and perform to meet customer demands or needs; • receiving qualified or adverse opinions in connection with security or penetration testing, certifications or audits, such as those related to IT controls and security standards and frameworks or compliance; • poor business conditions for our customers, causing them to delay software purchases; • reluctance of customers to purchase proprietary software products; • reluctance of our customers to purchase products hosted by our vendors and/or service interruption from such providers; • reluctance of customers to purchase products incorporating AI; and • reluctance of customers to purchase products incorporating open source software.
An acquisition, investment or business relationship may result in unforeseen risks, operating difficulties and expenditures, including the following: • any such transactions may negatively affect our financial results because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to such transactions; • costs and potential difficulties associated with the requirement to test and assimilate the internal control processes of the acquired business; • we may encounter difficulties or unforeseen expenditures assimilating or integrating the businesses, technologies, infrastructure, products, personnel, or operations of the acquired companies, particularly if the key personnel of the 29 Table of Contents acquired company choose not to work for us or if we are unable to retain key personnel, if their technology is not easily adapted to work with ours, or if we have difficulty retaining the customers of any acquired business due to changes in ownership, management, or otherwise; • we may not realize the expected benefits of the transaction; • an acquisition may disrupt our ongoing business, divert resources, increase our expenses, result in unfavorable public perception, and distract our management; • an acquisition may result in a delay or reduction of customer purchases for both us and the company acquired due to customer uncertainty about continuity and effectiveness of service from either company; • the potential impact on relationships with existing customers, vendors, and distributors as business partners as a result of acquiring another company or business that competes with or otherwise is incompatible with those existing relationships; • the potential that our due diligence of the applicable company or business does not identify significant problems or liabilities, or that we underestimate the costs and effects of identified liabilities; • exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, the transaction, including but not limited to claims from former employees, customers, or other third parties, which may differ from or be more significant than the risks our business faces; • potential goodwill impairment charges related to acquisitions; • we may encounter difficulties in, or may be unable to, successfully sell any acquired products; • the transaction may involve the entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions; • an acquisition may require us to comply with additional laws and regulations, or to engage in substantial remediation efforts to cause the acquired company to comply with applicable laws or regulations, or result in liabilities resulting from the acquired company’s failure to comply with applicable laws or regulations; • our use of cash to pay for the transaction would limit other potential uses for our cash; • if we incur debt to fund such a transaction, such debt may subject us to material restrictions on our ability to conduct our business as well as financial maintenance covenants; and • to the extent that we issue a significant amount of equity securities in connection with such transactions, existing stockholders may be diluted and earnings per share may decrease.
An acquisition, investment or business relationship may result in unforeseen risks, operating difficulties and expenditures, including the following: • any such transactions may negatively affect our financial results because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to such transactions; • costs and potential difficulties associated with the requirement to test and assimilate the internal control processes of the acquired business; • we may encounter difficulties or unforeseen expenditures assimilating or integrating the businesses, technologies, infrastructure, products, personnel, or operations of the acquired companies, particularly if the key personnel of the acquired company choose not to work for us or if we are unable to retain key personnel, if their technology is not easily adapted to work with ours, or if we have difficulty retaining the customers of any acquired business due to changes in ownership, management, or otherwise; • we may not realize the expected benefits of the transaction; • an acquisition may disrupt our ongoing business, divert resources, increase our expenses, result in unfavorable public perception, and distract our management; • an acquisition may result in a delay or reduction of customer purchases for both us and the company acquired due to customer uncertainty about continuity and effectiveness of service from either company; • the potential impact on relationships with existing customers, vendors, and distributors as business partners as a result of acquiring another company or business that competes with or otherwise is incompatible with those existing relationships; • the potential that our due diligence of the applicable company or business does not identify significant problems or liabilities, or that we underestimate the costs and effects of identified liabilities; • exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, the transaction, including but not limited to claims from former employees, customers, or other third parties, which may differ from or be more significant than the risks our business faces; • potential goodwill impairment charges related to acquisitions; • we may encounter difficulties in, or may be unable to, successfully sell any acquired products; • the transaction may involve the entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions; • an acquisition may require us to comply with additional laws and regulations, or to engage in substantial remediation efforts to cause the acquired company to comply with applicable laws or regulations, or result in liabilities resulting from the acquired company’s failure to comply with applicable laws or regulations; • our use of cash to pay for the transaction would limit other potential uses for our cash; • if we incur debt to fund such a transaction, such debt may subject us to material restrictions on our ability to conduct our business as well as financial maintenance covenants; and • to the extent that we issue a significant amount of equity securities in connection with such transactions, existing stockholders may be diluted and earnings per share may decrease.
These risks include: • increased leverage held by large customers in negotiating contractual arrangements with us; • changes in key decision makers within these organizations that may negatively impact our ability to negotiate in the future; 26 Table of Contents • customer IT departments may perceive that our platforms and services pose a threat to their internal control and advocate for legacy or internally developed solutions over our platforms; • resources may be spent on a potential customer that ultimately elects not to purchase our platforms and services; • challenges in successfully identifying, evaluating, and collaborating or teaming with one or more third-party partners or suppliers in order to jointly pursue, secure, and perform under large or complex customer contracts, including certain government procurement programs; • more stringent requirements in our service contracts, including stricter service response times, and increased penalties for any failure to meet service requirements; • increased competition from larger competitors, such as defense contractors, system integrators, or large software and service companies that traditionally target large enterprises and government entities and that may already have purchase commitments from those customers; and • less predictability in completing some of our sales than we do with smaller customers.
These risks include: • increased leverage held by large customers in negotiating contractual arrangements with us; • changes in key decision makers within these organizations that may negatively impact our ability to negotiate in the future; • customer IT departments may perceive that our platforms and services pose a threat to their internal control and advocate for legacy or internally developed solutions over our platforms; • resources may be spent on a potential customer that ultimately elects not to purchase our platforms and services; • challenges in successfully identifying, evaluating, and collaborating or teaming with one or more third-party partners or suppliers in order to jointly pursue, secure, and perform under large or complex customer contracts, including certain government procurement programs; • more stringent requirements in our service contracts, including stricter service response times, and increased penalties for any failure to meet service requirements; • increased competition from larger competitors, such as defense contractors, system integrators, or large software and service companies that traditionally target large enterprises and government entities and that may already have purchase commitments from those customers; and • less predictability in completing some of our sales than we do with smaller customers.
Issues raised by the use of AI (including machine learning, large language and other generative AI models, and software functionality to operationalize the foregoing) in our platforms and business may result in reputational harm or liability. AI is enabled by or integrated into some of our technology platforms and is a significant and growing element of our business.
Issues raised by the use of AI (including machine learning, large language, and other generative or agentic AI models, and software functionality to operationalize the foregoing) in our platforms and business may result in reputational harm or liability. AI is enabled by or integrated into some of our technology platforms and is a significant and growing element of our business.
We have used, and intend to continue to use, our website, investor relations website, and our LinkedIn and X (formerly known as Twitter) accounts as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.
We have used, and intend to continue to use, our website, investor relations website, and our LinkedIn and X (formerly Twitter) accounts as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.
We later began working with commercial enterprises, who often faced fundamentally similar challenges in working with data. We have built four principal software platforms, Palantir Gotham (“Gotham”), Palantir Foundry (“Foundry”), Palantir Apollo (“Apollo”), and Palantir Artificial Intelligence Platform (“AIP”).
We later began working with commercial enterprises, who often faced fundamentally similar challenges in working with data. We have built four principal software platforms, Palantir Gotham (“Gotham”), Palantir Foundry (“Foundry”), Palantir Apollo (“Apollo”), and our Artificial Intelligence Platform (“AIP”).
For example, we and our peers and competitors are investing more significantly in AI (including machine learning, large language and other generative AI models, and software functionality to operationalize the foregoing).
For example, we and our peers and competitors are investing more significantly in AI (including machine learning, large language, and other generative and agentic AI models, and software functionality to operationalize the foregoing).
Moreover, AI, including our use of AI, may create additional cybersecurity risks or increase existing cybersecurity risks, and may result in cyberattacks, security breaches, phishing attacks, personal data breaches, or other incidents.
Moreover, AI, including our use of AI, may create additional cybersecurity risks or increase existing cybersecurity risks, and may result in, or increase impacts of, cyberattacks, security breaches, phishing attacks, personal data breaches, or other incidents.
If an actual or perceived breach of security measures, unauthorized access to our system or the systems of the third-party vendors that we rely upon, or any other cybersecurity attack, threat, or incident occurs, we may face direct or indirect liability, costs, or damages, including expenses related to responding and/or alleviating an actual or perceived breach or other incident, contract termination, our reputation in the industry and with current and potential customers may be compromised, our ability to attract new customers could be negatively affected, our management’s attention could be diverted, and our business, financial condition, and results of operations could be materially and adversely affected.
If an actual or perceived breach of security measures, unauthorized access to our system or the systems of the third-party vendors that we rely upon, or any other cybersecurity attack, threat, or incident occurs, we may face direct or indirect liability, costs, or damages, including expenses related to responding and/or alleviating an actual or perceived breach or other incident, contract termination, our reputation in the industry and with current and potential customers may be compromised, our ability to 32 Table of Contents attract new customers could be negatively affected, our management’s attention could be diverted, and our business, financial condition, and results of operations could be materially and adversely affected.
It is also possible that remote work arrangements may have a negative impact on our ability to recruit, train, manage, and retain employees; our operations; our information, data security and cybersecurity; consumer privacy and the risk of fraud; the execution of our business plans; our ability to maintain and strengthen our company culture; the productivity and availability of key personnel and other employees necessary to conduct our business; and on third-party service providers who perform critical services for us, or otherwise cause operational failures due to changes in our normal business practices.
It is also possible that remote work arrangements may have a negative impact on our ability to recruit, train, manage, and retain employees; our operations; our information, data security and cybersecurity; consumer privacy and the risk of fraud; the execution of our business plans; our ability to maintain and strengthen our company culture; the 20 Table of Contents productivity and availability of key personnel and other employees necessary to conduct our business; and on third-party service providers who perform critical services for us, or otherwise cause operational failures due to changes in our normal business practices.
Larger competitors, such as defense contractors, system integrators, and large software and service companies that traditionally target large enterprises typically have more sizeable direct sales forces staffed by individuals with significantly more industry experience than our customer-facing personnel, which may negatively impact our ability to compete with these larger competitors.
Larger competitors, such as defense contractors, system integrators, and large software and service companies that traditionally target large enterprises typically have more sizable direct sales forces staffed by individuals with significantly more industry experience than our customer-facing personnel, which may negatively impact our ability to compete with these larger competitors.
Providing users with well-curated, up-to-date data is critical for building trust in an organization’s data foundation. Our platforms automatically maintain complete records of both data provenance and all transformations applied to data in the system, allowing users to assess the reliability of the data and facilitate the review and correction of inaccuracies when necessary.
Providing users with well-curated, up-to-date data is critical for building trust in an organization’s data foundation. Our platforms automatically maintain complete records of both data provenance and all transformations applied to data in the system, allowing users to assess the reliability of the data and facilitate the review and correction of inaccuracies when necessary. • AI Governance .
In 2023, we began deploying our newest offering, AIP, which is designed for customers across the commercial and government sectors, enabling them to derive value from recent breakthroughs in artificial intelligence via the combination of our existing software platforms with generative AI models, including LLMs.
In 2023, we began deploying our newest offering, AIP, which is designed for customers across the commercial and government sectors, enabling them to derive value from recent breakthroughs in AI via the combination of our existing software platforms with generative AI models, including LLMs.
While these obligations remain outstanding and are cash collateralized, we do not have access to and cannot use the pledged cash for our operations or to repay our other indebtedness. As of December 31, 2024, we were in compliance with all covenants and restrictions associated with our credit facility.
While these obligations remain outstanding and are cash collateralized, we do not have access to and cannot use the pledged cash for our operations or to repay our other indebtedness. As of December 31, 2025, we were in compliance with all covenants and restrictions associated with our credit facility.
Variable rate indebtedness that we may incur under our credit facility will subject us to interest rate risk, which could cause our debt service obligations to increase significantly. As of December 31, 2024, no borrowings were outstanding under our credit facility. Any borrowings under the credit facility bear interest at variable rates, which would expose us to interest rate risk.
Variable rate indebtedness that we may incur under our credit facility will subject us to interest rate risk, which could cause our debt service obligations to increase significantly. As of December 31, 2025, no borrowings were outstanding under our credit facility. Any borrowings under the credit facility bear interest at variable rates, which would expose us to interest rate risk.
If our efforts to expand within our existing customer base are not successful, our business may suffer. We may not realize the full deal value of our customer contracts, which may result in lower than expected revenue. As of December 31, 2024, the total remaining deal value, as defined in Item 7.
If our efforts to expand within our existing customer base are not successful, our business may suffer. We may not realize the full deal value of our customer contracts, which may result in lower than expected revenue. As of December 31, 2025, the total remaining deal value, as defined in Item 7.
In addition, delays in the completion of the U.S. government’s budgeting process, the use of continuing resolutions, and a potential lapse in appropriations, or similar events in other jurisdictions, has and could in the future adversely affect our ability to timely recognize revenue under certain government contracts.
In addition, delays in the completion of the U.S. government’s budgeting process, the use of continuing resolutions, and a potential lapse in appropriations, or similar events in other jurisdictions, have and could in the future adversely affect our ability to timely recognize revenue under certain government contracts.
As our organization continues to grow, we may find it increasingly difficult to maintain the benefits of our traditional company culture, including our ability to quickly respond to customers, and avoid unnecessary delays that may be associated with a formal corporate structure.
As our organization continues to grow and operate as a public company, we may find it increasingly difficult to maintain the benefits of our traditional company culture, including our ability to quickly respond to customers, and avoid unnecessary delays that may be associated with a formal corporate structure.
We incur costs related to attracting, relocating, and retaining qualified personnel in these highly competitive markets, including leasing real estate in prime areas in these locations. Further, many of the companies with which we compete for qualified personnel have greater resources than we have.
We incur costs related to attracting, relocating, and retaining qualified personnel in these highly competitive markets, including leasing real estate in prime areas in these locations and compensation-related expenses. Further, many of the companies with which we compete for qualified personnel have greater resources than we have.
In addition, as we continue to grow our operations and expand outside of the United States, we need to be able to provide efficient services that meet our customers’ needs globally at scale, and our services teams may face additional challenges, including those 21 Table of Contents associated with operating the platforms and delivering support, training, and documentation in languages other than English and providing services across expanded time-zones.
In addition, as we continue to grow our operations and expand outside of the United States, we need to be able to provide efficient services that meet our customers’ needs globally at scale, and our services teams may face additional challenges, including those associated with operating the platforms and delivering support, training, and documentation in languages other than English and providing services across expanded time-zones.
Our ability to sell or transfer, convert to cash, or realize value from, any 23 Table of Contents noncash consideration we have received, or may receive in the future, in a timely manner or at all, may be limited by, among other things, applicable securities law and regulations, and global market and macroeconomic conditions, which could adversely impact our business, financial condition, cash flows, and results of operations.
Our ability to sell or transfer, convert to cash, or realize value from, any noncash consideration we have received, or may receive in the future, in a timely manner or at all, may be limited by, among other things, applicable securities law and regulations, and global market and macroeconomic conditions, which could adversely impact our business, financial condition, cash flows, and results of operations.
For example, we have made and may continue to make strategic investments pursuant to certain approved agreements (“Investment Agreements”) to purchase, or commit to purchase, shares of various entities, including special purpose acquisition companies and/or other privately-held or publicly-traded entities (each, an “Investee,” and such purchases, the “Investments”); however, we do not currently anticipate entering into new Investment Agreements to purchase, or commit to purchase, securities of special purpose acquisition companies.
For example, we have made, and may continue to make, strategic investments pursuant to certain approved agreements (“Investment Agreements”) to purchase, or commit to purchase, shares of various entities, including special purpose acquisition companies and/or other privately-held or publicly-traded entities (each, an “Investee,” and such purchases, the “Investments”); however, we do not currently anticipate entering into new Investment Agreements to purchase, or commit to purchase, securities of special purpose acquisition 30 Table of Contents companies.
As a result of such acquisitions, our current or potential competitors may be able to accelerate the adoption of new technologies that better address customer needs, devote greater resources to bring these products and services to market, initiate or withstand substantial price competition, or develop and expand their product and service offerings more quickly than we do.
As a result of such acquisitions, our current or potential competitors may be able to accelerate the adoption of new technologies that better address customer needs, devote greater resources to bring these products and services to market, initiate or withstand substantial price competition, or develop and expand their product and service offerings more 24 Table of Contents quickly than we do.
Much of our hiring into technical roles comes through our internship program or from candidates joining us directly from undergraduate or graduate engineering programs rather than industry hires. Successful entry-level hires are often quickly advanced and rewarded with significant responsibilities, including in important customer-facing roles as project managers, development leads, and product managers.
Much of our hiring into technical roles comes through our internship program or from candidates joining us directly from undergraduate or graduate engineering programs rather than industry hires. Successful entry-level hires are often quickly advanced and rewarded with significant responsibilities, 25 Table of Contents including in important customer-facing roles as project managers, development leads, and product managers.
Furthermore, since 2020, we have entered into channel sales relationships and strategic alliances with various global system integrators that we believe provide us with more diverse go-to-market opportunities and access to a wider base of potential customers and pool of qualified subcontractor personnel that we can call upon to enhance and augment our implementation and engineering services.
Furthermore, since 2020, we have entered into channel sales relationships and strategic alliances with various global system integrators that we believe provide us with more diverse go-to-market 26 Table of Contents opportunities and access to a wider base of potential customers and pool of qualified subcontractor personnel that we can call upon to enhance and augment our implementation and engineering services.
We also cannot be sure that 32 Table of Contents our existing general liability insurance coverage and coverage for cyber liability or errors or omissions will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims or that the insurer will not deny coverage as to any future claim as a result of inapplicability of coverage or administrative or procedural issues.
We also cannot be sure that our existing general liability insurance coverage and coverage for cyber liability or errors or omissions will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims or that the insurer will not deny coverage as to any future claim as a result of inapplicability of coverage or administrative or procedural issues.
The successful execution of our strategy to increase our sales to existing customers, identify and engage new customers, and enter new U.S. and non-U.S. markets will depend, among other things, on our ability to successfully build and expand our sales organization and operations.
The successful execution of our strategy to increase our sales to existing customers, identify and engage new customers, and enter new U.S. and non-U.S. markets will depend, among other things, on our ability to successfully build and deploy our sales organization and operations.
Furthermore, our sales model has historically required us to spend months and invest significant resources working with customers on pilot deployments at no or low cost to them. Though we have begun to integrate shorter, more cost-effective programs such as bootcamps, these initial deployments (including bootcamps) may result in no or minimal future revenue.
Furthermore, our sales model has historically required us to spend months and invest significant resources working with customers on pilot deployments at no or low cost to them. Though we have integrated shorter, more cost-effective programs such as bootcamps, these initial deployments (including bootcamps) may result in no or minimal future revenue.
We often also provide our platforms to potential customers (including individual users at such customers) at no or low cost initially to them for evaluation purposes through short-term pilot deployments of our platforms, including at bootcamps, and there is no guarantee that we will be able to convert customers from these short-term pilot deployments to longer-term revenue-generating contracts.
We often also provide our platforms to potential customers (including individual users 13 Table of Contents at such customers) at no or low cost initially to them for evaluation purposes through short-term pilot deployments of our platforms, including at bootcamps, and there is no guarantee that we will be able to convert customers from these short-term pilot deployments to longer-term revenue-generating contracts.
Our government customers remain a meaningful source of revenue for our business. We intend to capture an even greater share of U.S. federal government spending on software systems. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Our Customers” for a discussion of the terms of our government contracts.
Our government customers remain a meaningful source of revenue for our business. We intend to capture an even greater share of U.S. federal government spending on software systems. 7 Table of Contents See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Our Customers” for a discussion of the terms of our government contracts.
Further, as we increase the number of customers we serve on our cloud environment, the likelihood increases that some usage of our products may occur that violates 31 Table of Contents our terms of service or is otherwise improper or perceived as improper, which could cause reputational damage and adversely affect our business, financial condition, and results of operations.
Further, as we increase the number of customers we serve on our cloud environment, the likelihood increases that some usage of our products may occur that violates our terms of service or is otherwise improper or perceived as improper, which could cause reputational damage and adversely affect our business, financial condition, and results of operations.
The estimates and assumptions that are used to calculate our market opportunity are subject to change over time, and there is no guarantee that any particular number or percentage of the organizations covered by our market opportunity estimates will pay for our platforms 27 Table of Contents and services at all or generate any particular level of revenue for us.
The estimates and assumptions that are used to calculate our market opportunity are subject to change over time, and there is no guarantee that any particular number or percentage of the organizations covered by our market opportunity estimates will pay for our platforms and services at all or generate any particular level of revenue for us.
Our inability to take any of these actions because adequate funds are not available on acceptable terms could have an adverse impact on our business, financial condition, results of operations, and growth prospects. 28 Table of Contents Our debt agreements contain restrictions that may limit our flexibility in operating our business.
Our inability to take any of these actions because adequate funds are not available on acceptable terms could have an adverse impact on our business, financial condition, results of operations, and growth prospects. Our debt agreements contain restrictions that may limit our flexibility in operating our business.
Beyond access controls, organizations can also apply dynamic data minimization procedures such as pseudonymization, obfuscation, and encryption to adhere to compliance obligations while considering the context of specific workflows. 9 Table of Contents • Sensitive Data Discovery and Management. Palantir’s software platforms enable users to securely integrate and analyze sensitive data.
Beyond access controls, organizations can also apply dynamic data minimization procedures such as pseudonymization, obfuscation, and encryption to adhere to compliance obligations while considering the context of specific workflows. • Sensitive Data Discovery and Management. Palantir’s software platforms enable users to securely integrate and analyze sensitive data.
We seek to protect our proprietary inventions relevant to our business through patent protection in the United States and abroad; however, we are not dependent on any particular patent or application for the operation of our business. 10 Table of Contents In addition, we have registered “Palantir” as a trademark in the United States and other jurisdictions.
We seek to protect our proprietary inventions relevant to our business through patent protection in the United States and abroad; however, we are not dependent on any particular patent or application for the operation of our business. In addition, we have registered “Palantir” as a trademark in the United States and other jurisdictions.
For example, in March 2024, we were selected by the U.S. Army to develop and deliver the Tactical Intelligence Targeting Access Node ground station system, the Army’s first AI-defined vehicle, which will involve coordination with third parties such as hardware manufacturers.
For example, in March 2024, we were selected by the U.S. Army to develop and deliver the Tactical Intelligence Targeting Access Node ground station system, the Army’s first AI-defined vehicle, which involves coordination with third parties such as hardware manufacturers.
Other factors that may cause fluctuations in our quarterly results of operations and financial position include, without limitation, those listed below: • the success of our sales and marketing efforts, including the success of our pilot deployments (including bootcamps); • our ability to increase our contribution margins; • the timing of expenses and revenue recognition, including from changes in accounting assumptions or estimates; • the timing and amount of payments received from our customers; • termination of one or more large contracts by customers, including for convenience; • the time and cost-intensive nature of our sales efforts and the length and variability of sales cycles; • the amount and timing of operating expenses related to the development, maintenance, and expansion of our business and operations; • the timing and effectiveness of new sales and marketing initiatives; • changes in our pricing policies or those of our competitors; • the timing and success of new platforms, products, features, and functionality introduced by us or our competitors; • interruptions or delays in our operations and maintenance (“O&M”) services; • cyberattacks and other actual or perceived data or security breaches or incidents; • our ability to hire and retain employees, in particular, those responsible for operations and maintenance of and the selling or marketing of our platforms, and develop and retain talented sales personnel who are able to achieve desired productivity levels in a reasonable period of time and provide sales leadership in areas in which we are expanding our sales and marketing efforts; • the amount and timing of our stock-based compensation expenses; • the amount and timing of employer payroll taxes related to stock-based compensation resulting from increases in our stock price; • changes in the way we organize and compensate our employees; • changes in the way we operate and maintain our platforms; • unforeseen negative results in operations from our partnerships; • changes in the competitive dynamics of our industry; • the cost of and potential outcomes of existing and future claims or litigation, which could have a material adverse effect on our business; • changes in laws and regulations that impact our business, such as the FASA or the European Union (“EU”) AI Act (“EU AIA”); • indemnification payments to our customers or other third parties; • ability to scale our business with increasing demands; • the timing of expenses related to any future acquisitions; and • general economic, regulatory, and market conditions, including the impacts of ongoing conflicts, such as those in Russia-Ukraine and Israel, and any related economic sanctions and regional instability, heightened interest rates, monetary policy changes, or foreign currency fluctuations.
Other factors that may cause fluctuations in our quarterly results of operations and financial position include, without limitation, those listed below: • the success of our sales and marketing efforts, including the success of our pilot deployments (including bootcamps); • our ability to increase our contribution margins; • the timing of expenses and revenue recognition, including from changes in accounting assumptions or estimates; • the timing and amount of payments received from our customers; • termination of one or more large contracts by customers, including for convenience; • the time and cost-intensive nature of our sales efforts and the length and variability of sales cycles; • the amount and timing of operating expenses related to the development, maintenance, and expansion of our business and operations; • the timing and effectiveness of new sales and marketing initiatives; • changes in our pricing policies or those of our competitors; • the timing and success of new platforms, products, features, and functionality introduced by us or our competitors; • interruptions or delays in our operations and maintenance (“O&M”) services; • cyberattacks and other actual or perceived data, privacy, cyber, or physical security breaches or incidents, and related expenses; 16 Table of Contents • our ability to hire and retain employees, in particular, those responsible for operations and maintenance of and the selling or marketing of our platforms, and develop and retain talented sales personnel who are able to achieve desired productivity levels in a reasonable period of time and provide sales leadership in areas in which we are expanding our sales and marketing efforts; • the amount and timing of our stock-based compensation expenses; • the amount and timing of employer payroll taxes related to stock-based compensation resulting from increases in our stock price; • changes in the way we organize and compensate our employees; • changes in the way we operate and maintain our platforms; • unforeseen negative results in operations from our partnerships; • changes in the competitive dynamics of our industry; • the cost of and potential outcomes of existing and future claims or litigation, which could have a material adverse effect on our business; • changes in laws and regulations that impact our business, such as the FASA or the European Union (“EU”) AI Act (“EU AIA”); • indemnification payments to our customers or other third parties; • ability to scale our business with increasing demands; • the timing of expenses related to any future acquisitions; and • general economic, regulatory, and market conditions, including the impacts of ongoing conflicts, such as those in Russia-Ukraine, and Israel and the broader Middle East, and any related economic sanctions and regional instability, fluctuating interest rates, monetary policy changes, foreign currency fluctuations, or the potential or actual imposition of tariffs or other impacts on trade relations.
Further, if we are not able to recruit, hire, or retain the talent we need because of increased regulation of immigration or work visas, including limitations placed on the number of visas granted, limitations on the type of work performed or location in which the work can be performed, and new or higher minimum salary requirements, it could be more difficult to staff our personnel on customer engagements and could increase our costs.
Further, if we are not able to recruit, hire, or retain the talent we need because of increased regulation of immigration or work visas, including limitations placed on the number of visas granted, changes to application processes or fees, limitations on the type of work performed or location in which the work can be performed, and new or higher minimum salary requirements, it could be more difficult to staff our personnel on customer engagements and could increase our costs.
In addition, if our customers do not use our platforms correctly or as intended, inadequate performance or outcomes may result. It is possible that our platforms may also be intentionally misused or abused by customers or their employees or third parties 17 Table of Contents who obtain access and use of our platforms.
In addition, if our customers do not use our platforms correctly or as intended, inadequate performance or outcomes may result. It is possible that our platforms may also be intentionally misused or abused by customers or their employees or third parties who obtain access and use of our platforms.
If we raise equity financing to fund operations or on an opportunistic basis, our stockholders may experience significant dilution of their ownership interests. Additionally, tightening of the credit markets and high interest rates continue to negatively impact the capital raising environment.
If we raise equity financing to fund operations or on an opportunistic basis, our stockholders may experience significant dilution of their ownership interests. Additionally, tightening of portions of the credit markets and fluctuating interest rates continue to negatively impact the capital raising environment.
The variability and unpredictability of our quarterly results of operations, cash flows, or other operating metrics could result in our failure to meet our expectations or those of analysts that cover us or investors with respect to revenue or other key metrics 16 Table of Contents for a particular period.
The variability and unpredictability of our quarterly results of operations, cash flows, or other operating metrics could result in our failure to meet our expectations or those of analysts that cover us or investors with respect to revenue or other key metrics for a particular period.
Large enterprises and government entities often undertake a significant evaluation process that results in a lengthy sales cycle, in some cases over twelve months, requiring approvals of multiple management personnel and more technical personnel than would be typical of a smaller organization.
Large enterprises and government entities often undertake a significant evaluation process that results in a lengthy sales cycle, in some cases over twelve months, requiring approvals of multiple management personnel and more technical personnel than 27 Table of Contents would be typical of a smaller organization.
With AIP, trusted data from relevant sources can be integrated into business logic, machine-language models, optimizers, and other computations spread across varying environments to power enterprise and government processes and help drive critical decisions. Customers may bundle these platforms together as a single ecosystem.
With AIP, trusted data from relevant sources within an organization’s Ontology can be integrated into business logic, machine-language models, optimizers, and other computations spread across varying environments to power enterprise and government processes and help drive critical decisions. Customers may bundle these platforms together as a single ecosystem.
We have and are continuing to develop partnerships in industries such as airline, insurance, healthcare, automotive, security and risk management, and government, which we anticipate will have a significant impact on our business moving forward. U.S. Government We continue to believe we are uniquely positioned to provide commercially available software to the U.S. federal government.
We have developed, and are continuing to develop, partnerships in industries such as airline, space, shipbuilding, insurance, healthcare, telecommunications, automotive, security and risk management, and government, which we anticipate will have a significant impact on our business moving forward. U.S. Government We continue to believe we are uniquely positioned to provide commercially available software to the U.S. federal government.
Certain companies with which we have entered into commercial contracts have been, and may continue to be, unable to generate sufficient revenues or profitability or to access any necessary financing or funding in a timely manner or on favorable terms to 30 Table of Contents them, which has negatively impacted, and may continue to negatively impact, our expected revenue and collections.
Certain companies with which we have entered into commercial contracts have been, and may continue to be, unable to generate sufficient revenues or profitability or to access any necessary financing or funding in a timely manner or on favorable terms to them, which has negatively impacted, and may continue to negatively impact, our expected revenue and collections.
Our customers are using data to inform decisions with significant implications for individuals. Rather than relying 8 Table of Contents exclusively on algorithms that may inhibit accountability and redress, we build in means for humans to make necessary judgment calls based on their context and intuition. • Systems must facilitate accountability and oversight.
Our customers are using data to inform decisions with significant implications for individuals. Rather than relying exclusively on algorithms that may inhibit accountability and redress, we build in means for humans to make necessary judgment calls based on their context and intuition. • Systems must facilitate accountability and oversight.
Our customers have no obligation to renew, upgrade, or expand their agreements with us after the terms of their existing agreements 14 Table of Contents have expired. In addition, many of our customer contracts permit the customer to terminate their contracts with us with notice periods of varying lengths.
Our customers have no obligation to renew, upgrade, or expand their agreements with us after the terms of their existing agreements have expired. In addition, many of our customer contracts permit the customer to terminate their contracts with us with notice periods of varying lengths.
Increasing the size and number of the deployments of our existing customers is a major part of our growth strategy. We may not be effective in executing this or any other aspect of our growth strategy. Our top three customers together accounted for 17% and 18% of our revenue for the years ended December 31, 2024 and 2023, respectively.
Increasing the size and number of the deployments of our existing customers is a major part of our growth strategy. We may not be effective in executing this or any other aspect of our growth strategy. Our top three customers together accounted for 16% and 17% of our revenue for the years ended December 31, 2025 and 2024, respectively.
Available Information Our website is https://www.palantir.com, our investor relations website is https://investors.palantir.com, our LinkedIn account is @Palantir Technologies, and our X (formerly known as Twitter) account is @PalantirTech.
Available Information Our website is https://www.palantir.com, our investor relations website is https://investors.palantir.com, our LinkedIn account is @Palantir Technologies, and our X (formerly Twitter) account is @PalantirTech.
In addition, downturns in new sales may not be immediately reflected in our revenue because we generally recognize revenue over the term of our contracts. The timing of 15 Table of Contents customer billing and payment varies from contract to contract.
In addition, downturns in new sales may not be immediately reflected in our revenue because we generally recognize revenue over the term of our contracts. The timing of customer billing and payment varies from contract to contract.
Further, our references to the URLs for these websites are intended to be inactive textual references only. 11 Table of Contents ITEM 1A. RISK FACTORS Investing in our Class A common stock involves a high degree of risk.
Further, our references to the URLs for these websites are intended to be inactive textual references only. ITEM 1A. RISK FACTORS Investing in our Class A common stock involves a high degree of risk.
In addition, as we continue to expand our platform and product offerings, or experience greater adoption of certain of our platform and product offerings, we have and may continue to experience variability in our revenue growth in certain markets or with 13 Table of Contents certain customer segments relative to other markets or customer segments.
In addition, as we continue to expand our platform and product offerings, or experience greater adoption of certain of our platform and product offerings, we have and may continue to experience variability in our revenue growth in certain markets or with certain customer segments relative to other markets or customer segments.
If our customers do not renew or expand their agreements with us or if they renew their contracts for shorter lengths or on other terms less favorable to us, our revenue may grow more slowly than expected or decline, and our business could suffer.
If our customers do not renew or expand their agreements with 14 Table of Contents us or if they renew their contracts for shorter lengths or on other terms less favorable to us, our revenue may grow more slowly than expected or decline, and our business could suffer.
In addition, any significant change to the way we structure and implement the compensation of our sales organization may be disruptive or may not be effective and may affect our revenue growth.
In addition, any significant change to the way we structure and implement the compensation of our sales organization may be disruptive or may not be effective and may affect 21 Table of Contents our revenue growth.
In such locations or environments, we may not have full control over how our platforms and products are deployed, managed, or secured, our standards for information security may not be met, and our ability to deploy certain security features and controls may be limited.
In 31 Table of Contents such locations or environments, we may not have full control over how our platforms and products are deployed, managed, or secured, our standards for information security may not be met, and our ability to deploy certain security features and controls may be limited.
Such zones are subject to, among other things, political uncertainty, geopolitical tensions, and military actions, such as those associated with the ongoing Russia-Ukraine and Israel conflicts.
Such zones are subject to, among other things, political uncertainty, geopolitical tensions, and military actions, such as those associated with the ongoing Russia-Ukraine, and Israel and broader Middle East conflicts.
It provides unified access to open-source, self-hosted, and commercially available LLMs that can transform structured and unstructured data into LLM-understandable objects and can 5 Table of Contents turn organizations’ actions and processes into tools for humans and LLM-driven agents.
It provides unified access to open-source, self-hosted, and commercially available LLMs that can transform structured and unstructured data into LLM-understandable objects and can turn organizations’ actions and processes into tools for humans and LLM-driven agents.
Additional equity or debt financing may not be available on favorable terms, or at all. Historically, we have funded our operations and capital expenditures primarily through cash flows from operations, equity issuances, and proceeds from option exercises.
Additional equity or debt financing may not be available on favorable terms, or at all. 28 Table of Contents Historically, we have funded our operations and capital expenditures primarily through cash flows from operations, equity issuances, and proceeds from option exercises.
Our results of operations depend on sales to enterprise customers, which make product purchasing decisions based in part or entirely on factors, or perceived factors, not directly related to the features of the platforms, including, among others, that customer’s projections of business growth, uncertainty about macroeconomic conditions (including as a result of the ongoing Russia-Ukraine conflict and related economic sanctions, the conflict resulting from Hamas’ attack on Israel, heightened interest rates, monetary policy changes, or foreign currency fluctuations), capital budgets, anticipated cost savings from the implementation of our platforms, potential preference for such customer’s internally-developed software solutions, perceptions about our business and platforms, more favorable terms offered by potential competitors, and previous technology investments.
Our results of operations depend on sales to enterprise customers, which make product purchasing decisions based in part or entirely on factors, or perceived factors, not directly related to the features of the platforms, including, among others, that customer’s projections of business growth, uncertainty about macroeconomic conditions (including as a result of the ongoing Russia-Ukraine conflict and related economic sanctions, the conflict resulting from Hamas’ attack on Israel and the ongoing conflict in the Middle East, fluctuating interest rates, monetary policy changes, foreign currency fluctuations, or the potential or actual imposition of tariffs or other impacts on trade relations), capital budgets, anticipated cost savings from the implementation of our platforms, potential preference for such customer’s internally-developed software solutions, perceptions about our business and platforms, more favorable terms offered by potential competitors, and previous technology investments.
While we have historically billed and collected payments for multiple contract years from certain customers in advance, we have shifted, and may continue to shift, to collecting payments on an annual or other basis, including in arrears.
While we have historically billed and 17 Table of Contents collected payments for multiple contract years from certain customers in advance, we have shifted, and may continue to shift, to collecting payments on an annual or other basis, including in arrears.
If our sales efforts to a potential customer do not result in sufficient revenue to justify our investments, including in our growing direct sales force, our business, financial condition, and results of operations could be adversely affected.
If our sales efforts to a potential customer do not result in sufficient revenue to justify our investments, including our investments in sales and marketing, our business, financial condition, and results of operations could be adversely affected.
While they vary in specific functionality, they align in approach. AIP provides an integrated architecture to Gotham and Foundry that can bring AI to every decision. These platforms, backed by Apollo, can be deployed in almost any environment.
While they vary in specific functionality, they align in approach. AIP provides an integrated architecture to Gotham and Foundry that can bring AI to every decision. These platforms, backed by Apollo and with Ontology at their heart, can be deployed in almost any environment.
Activist criticism of our relationships with customers could potentially engender dissatisfaction among potential and existing customers, investors, and employees with how we address political and social concerns in our business activities.
Activist criticism and government or regulatory inquiries of our relationships with customers could potentially engender dissatisfaction among potential and existing customers, investors, and employees with how we address political and social concerns in our business activities.
The average revenue for our top twenty customers during the trailing twelve months ended December 31, 2024 was $64.6 million, and is up from 2023, when the average revenue from our top twenty customers during the trailing twelve months ended December 31, 2023 was $54.6 million, demonstrating our expanding relationships with existing customers.
The average revenue for our top twenty customers during the trailing twelve months ended December 31, 2025 was $93.9 million, and is up from 2024, when the average revenue from our top twenty customers during the trailing twelve months ended December 31, 2024 was $64.6 million, demonstrating our expanding relationships with existing customers.
If the perceived value of our equity awards declines, or if the mix of equity and cash compensation or the structure and terms of the compensation that we offer is less attractive than that of our competitors, it may adversely affect our ability to recruit and retain highly skilled personnel.
If the perceived value of our equity awards declines, or if the mix of equity and cash compensation or the structure and terms of the compensation that we offer is less attractive than that of our competitors, it may adversely affect our ability to recruit and retain highly skilled personnel, and we may incur additional compensation-related expenses to successfully recruit and retain such personnel.
We have also incorporated AI into certain operations within our business, including by using our platforms for internal functions, and have developed internal policies to govern AI use. As with many developing technologies, AI presents risks and challenges that could affect its further development, adoption, and use, and therefore our business. AI algorithms and models may be flawed.
We have also incorporated AI into certain operations within our business, including by using our platforms for internal functions, and have developed internal policies and technological capabilities to govern AI use. As with many developing technologies, AI presents risks and challenges that could affect its further development, adoption, and use, and therefore our business.
If software for the challenges that we address does not achieve widespread adoption, or there is a reduction in demand caused by a lack of customer acceptance, technological challenges, weakening economic conditions (including due to the ongoing Russia-Ukraine conflict and related economic sanctions, heightened interest rates, or monetary policy changes), security or privacy concerns, competing technologies and products, decreases in corporate spending, or otherwise, or, alternatively, if the market develops but we are unable to continue to penetrate it due to the cost, performance, and perceived value associated with our platforms, or other factors, it could result in decreased revenue and our business, financial condition, and results of operations could be adversely affected.
If software for the challenges that we address does not achieve widespread adoption, or there is a reduction in demand caused by a lack of customer acceptance, technological challenges, weakening economic conditions (including due to ongoing global conflicts and related economic sanctions, fluctuating interest rates, monetary policy changes, or the potential or actual imposition of tariffs or other impacts on trade relations), security or privacy concerns, competing technologies and products, decreases in corporate spending, or otherwise, or, alternatively, if the market develops but we are unable to continue to penetrate it due to the cost, performance, and perceived value associated with our platforms, or other factors, it could result in decreased revenue and our business, financial condition, and results of operations could be adversely affected.
For example, our platforms include data governance, machine learning modeling, as well as model testing and evaluation tools which help to regulate and limit user access to data sets and develop, deploy, and manage more effective and responsible AI capabilities.
For example, our platforms include data and AI use case governance, machine learning modeling, as well as model testing and evaluation tools which help to regulate 33 Table of Contents and limit user access to data sets and develop, deploy, and manage more effective and responsible AI capabilities.
See “Risk Factors—Seasonality may cause fluctuations in our results of operations and financial position.” Employees and Human Capital Our employees are critical to the success of our business. As of December 31, 2024, we had 3,936 full-time employees, 31% of whom are employed outside of the United States.
See “Risk Factors—Seasonality may cause fluctuations in our results of operations and financial position.” Employees and Human Capital Our employees are critical to the success of our business. As of December 31, 2025, we had 4,429 full-time employees, 28% of whom are employed outside of the United States.
Our top three customers by revenue for the year ended December 31, 2024, have been with us for an average of nine years as of December 31, 2024.
Our top three customers by revenue for the year ended December 31, 2025, have been with us for an average of ten years as of December 31, 2025.
As of December 31, 2024, the cumulative amount of revenue recognized from Strategic Commercial Contracts was $306.2 million, of which $52.3 million was recognized by us during the fiscal year ended December 31, 2024. The occurrence of any of these risks could have a material adverse effect on our business, results of operations, and financial condition.
As of December 31, 2025, the cumulative amount of revenue recognized from Strategic Commercial Contracts was $321.5 million, of which $15.3 million was recognized by us during the fiscal year ended December 31, 2025. The occurrence of any of these risks could have a material adverse effect on our business, results of operations, and financial condition.
As we continue to expand our business, industry verticals, and the breadth of our operations, upgrade our infrastructure, hire additional employees, expand into new markets, invest in research and development, invest in sales and marketing, including expanding our sales organization and related sales-based payments that may come with such expansion, lease more real estate to accommodate our anticipated future growth, and incur costs associated with general administration, including expenses related to being a public company, we expect that our costs of revenue and operating expenses will continue to increase.
As we continue to expand our business, industry verticals, and the breadth of our operations, upgrade our infrastructure, 15 Table of Contents hire additional employees, expand into new markets, invest in research and development, invest in sales and marketing, lease more real estate to accommodate our anticipated future growth, and incur costs associated with general administration, including expenses related to being a public company, we expect that our costs of revenue and operating expenses will continue to increase.
In either case, the resulting harm to our reputation could: • cause certain customers to cease doing business with us; • impair our ability to attract new customers, or to expand our relationships with existing customers; • diminish our ability to recruit, hire, or retain employees; 22 Table of Contents • undermine our standing in professional communities to which we contribute and from which we receive expert knowledge; or • prompt us to cease doing business with certain customers.
In either case, the resulting harm to our reputation could: • cause certain customers to cease doing business with us; • impair our ability to attract new customers, or to expand our relationships with existing customers; • diminish our ability to recruit, hire, or retain employees; • undermine our standing in professional communities to which we contribute and from which we receive expert knowledge; • trigger additional external scrutiny or litigation; or • prompt us to cease doing business with certain customers.
As we have grown, we have increasingly managed larger and more complex deployments of our platforms and services with a broader base of government and commercial customers. As we continue to grow, we face challenges of integrating, developing, retaining, and motivating our employee base in various countries around the world.
As we have grown, we have increasingly managed larger and more complex deployments of our platforms and services with a broader base of government and commercial customers. As we continue to grow, we face challenges of integrating, developing, retaining, and motivating our employee base of 4,429 full-time employees as of December 31, 2025 in various countries around the world.
The successful promotion of our brand depends upon our ability to continue to offer high-quality software, maintain strong relationships with our customers, the community, and others, while successfully differentiating our platforms from those of our competitors. Unfavorable media coverage may adversely affect our brand and reputation.
The successful promotion of our brand depends upon our ability to continue to offer high-quality software, maintain strong relationships with our customers, the community, and others, while successfully differentiating our platforms from those of our competitors.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese noncash or unallocated costs include stock-based compensation expense, research and development costs, and general and administrative costs. 72 Table of Contents Results of Operations The following table summarizes our consolidated statements of operations data (in thousands): Years Ended December 31, 2024 2023 2022 Revenue $ 2,865,507 $ 2,225,012 $ 1,905,871 Cost of revenue 565,990 431,105 408,549 Gross profit 2,299,517 1,793,907 1,497,322 Operating expenses: Sales and marketing 887,755 744,992 702,511 Research and development 507,878 404,624 359,679 General and administrative 593,481 524,325 596,333 Total operating expenses 1,989,114 1,673,941 1,658,523 Income (loss) from operations 310,403 119,966 (161,201) Interest income 196,792 132,572 20,309 Other income (expense), net (18,022) (15,447) (220,135) Income (loss) before provision for income taxes 489,173 237,091 (361,027) Provision for income taxes 21,255 19,716 10,067 Net income (loss) 467,918 217,375 (371,094) Less: Net income attributable to noncontrolling interests 5,728 7,550 2,611 Net income (loss) attributable to common stockholders $ 462,190 $ 209,825 $ (373,705) The following table sets forth the components of our consolidated statements of operations data as a percentage of revenue: Years Ended December 31, 2024 2023 2022 Revenue 100 % 100 % 100 % Cost of revenue 20 19 21 Gross margin 80 81 79 Operating expenses: Sales and marketing 31 34 37 Research and development 18 18 19 General and administrative 20 24 31 Total operating expenses 69 76 87 Income (loss) from operations 11 5 (8) Interest income 7 6 1 Other income (expense), net (1) — (12) Income (loss) before provision for income taxes 17 11 (19) Provision for income taxes 1 1 1 Net income (loss) 16 10 (20) Less: Net income attributable to noncontrolling interests — 1 — Net income (loss) attributable to common stockholders 16 % 9 % (20) % 73 Table of Contents Comparison of the Years Ended December 31, 2024 and 2023 Revenue Years Ended December 31, Change 2024 2023 Amount % Revenue: Government $ 1,569,605 $ 1,222,215 $ 347,390 28 % Commercial 1,295,902 1,002,797 293,105 29 % Total revenue $ 2,865,507 $ 2,225,012 $ 640,495 29 % Revenue increased by $640.5 million, or 29%, for the year ended December 31, 2024 compared to 2023.
Biggest changeResults of Operations The following table summarizes our consolidated statements of operations data (in thousands): Years Ended December 31, 2025 2024 2023 Revenue $ 4,475,446 $ 2,865,507 $ 2,225,012 Cost of revenue 789,177 565,990 431,105 Gross profit 3,686,269 2,299,517 1,793,907 Operating expenses: Sales and marketing 1,056,859 887,755 744,992 Research and development 557,677 507,878 404,624 General and administrative 657,718 593,481 524,325 Total operating expenses 2,272,254 1,989,114 1,673,941 Income from operations 1,414,015 310,403 119,966 Interest income 229,181 196,792 132,572 Other income (expense), net 14,172 (18,022) (15,447) Income before provision for income taxes 1,657,368 489,173 237,091 Provision for income taxes 22,724 21,255 19,716 Net income 1,634,644 467,918 217,375 Less: Net income attributable to noncontrolling interests 9,611 5,728 7,550 Net income attributable to common stockholders $ 1,625,033 $ 462,190 $ 209,825 The following table sets forth the components of our consolidated statements of operations data as a percentage of revenue: Years Ended December 31, 2025 2024 2023 Revenue 100 % 100 % 100 % Cost of revenue 18 20 19 Gross margin 82 80 81 Operating expenses: Sales and marketing 23 31 34 Research and development 12 18 18 General and administrative 15 20 24 Total operating expenses 50 69 76 Income from operations 32 11 5 Interest income 5 7 6 Other income (expense), net — (1) — Income before provision for income taxes 37 17 11 Provision for income taxes 1 1 1 Net income 36 16 10 Less: Net income attributable to noncontrolling interests — — 1 Net income attributable to common stockholders 36 % 16 % 9 % 74 Table of Contents Comparison of the Years Ended December 31, 2025 and 2024 Revenue Years Ended December 31, Change 2025 2024 Amount % Revenue: Government $ 2,402,287 $ 1,569,605 $ 832,682 53 % Commercial 2,073,159 1,295,902 777,257 60 % Total revenue $ 4,475,446 $ 2,865,507 $ 1,609,939 56 % Revenue increased by $1.6 billion, or 56%, for the year ended December 31, 2025 compared to 2024.
On-Premises Software Sales of our software licenses, primarily term licenses, grant customers the right to use functional intellectual property, either on their internal hardware infrastructure or on their own cloud instance, over the contractual term and are also sold together with stand-ready O&M services.
On-Premises Software Sales of our software licenses, primarily term licenses, grant customers the right to use functional intellectual property, either on their internal hardware infrastructure or on their own cloud instance, over the contractual term and are also sold together with stand-ready O&M services.
Because of this requirement, we have concluded that the software licenses and O&M services, which together we refer to as our On-Premises Software, are highly interdependent and interrelated and represent a single distinct performance obligation within the context of the contract. Revenue is generally recognized over the contract term on a ratable basis.
Because of this requirement, we have concluded that the software licenses and O&M services, which together we refer to as our On-Premises Software, are highly interdependent and interrelated and represent a single distinct performance obligation within the context of the contract. Revenue is generally recognized over the contract term on a ratable basis.
Additionally, certain of our U.S. and non-U.S. subsidiaries may hold monetary assets and 68 Table of Contents liabilities in currencies other than their functional currency (primarily the JPY, Euro, and GBP), which could subject our results of operations and cash flows to adverse fluctuations due to changes in such foreign currency exchange rates as compared to the U.S. dollar.
Additionally, certain of our U.S. and non-U.S. subsidiaries may hold monetary assets and liabilities in currencies other than their functional currency (primarily the JPY, Euro, and GBP), which could subject our results of operations and cash flows to adverse fluctuations due to changes in such foreign currency exchange rates as compared to the U.S. dollar.
As of December 31, 2024, we had no outstanding debt balances and additional available and undrawn revolving commitments of $500.0 million under our credit facility. For more information, see Note 6. Debt in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Leases in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information. As of December 31, 2025, we had no outstanding debt balances and additional available and undrawn revolving commitments of $500.0 million under our credit facility. For more information, see Note 6.
Cost of Revenue Cost of revenue primarily includes salaries, stock-based compensation expense, and benefits for personnel involved in performing O&M and professional services, as well as subcontractor expenses, field-service representatives, third-party cloud hosting services, hardware costs, travel costs, allocated overhead, and other direct costs.
Cost of Revenue Cost of revenue primarily includes salaries, stock-based compensation expense, and benefits for personnel involved in performing O&M and professional services, as well as subcontractor expenses, field-service representatives, third-party cloud hosting services, hardware costs, and other direct costs.
We use it, in part, to evaluate the performance of, and allocate resources to, each of our operating segments, which excludes certain operating expenses that are not allocated to operating segments because they are separately managed at the consolidated corporate level, or are noncash costs.
We use it, in part, to evaluate the performance of, and allocate resources to, each of our operating segments, which excludes certain operating expenses that are not allocated to operating segments because they are separately managed at the consolidated corporate level, 73 Table of Contents or are noncash costs.
We exclude stock-based compensation, which is a noncash expense, from these non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance and provides useful information to investors and others in understanding and evaluating our operating results in 69 Table of Contents the same manner as our management team.
We exclude stock-based compensation, which is a noncash expense, from these non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance and provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team.
General and Administrative General and administrative costs include salaries, stock-based compensation expense, and benefits for personnel involved in our executive, finance, legal, human resources, and administrative functions, as well as third-party professional services and fees, travel costs, and allocated overhead.
General and Administrative General and administrative costs include salaries, stock-based compensation expense, and benefits for personnel involved in our executive, finance, legal, human resources, and administrative functions, as well as third-party professional services and fees.
When calculating the total remaining deal value of government contracts, we do not include government contracts known as IDIQ contracts, totaling $3.7 billion, as of December 31, 2024, that we have also been awarded, but where the funding of such contracts has not yet been determined or guaranteed.
When calculating the total remaining deal value of government contracts, we do not include government contracts known as IDIQ contracts, totaling $12.3 billion, as of December 31, 2025, that we have also been awarded, but where the funding of such contracts has not yet been determined or guaranteed.
While the ongoing Russia-Ukraine and Israel conflicts are still evolving and the outcomes remain highly uncertain, we do not expect that the resulting challenging macroeconomic conditions will have a material impact on our business or results of operations.
While the ongoing Russia-Ukraine, Israel and broader Middle East, and other global conflicts are still evolving and the outcomes remain highly uncertain, we do not expect that the resulting challenging macroeconomic conditions will have a material impact on our business or results of operations.
Revenue from U.S. commercial customers was $702.3 million for the year ended December 31, 2024 compared to $457.1 million for the same period in 2023, a 54% increase. Generally, increases in revenue from our existing customers are related to the increased adoption of our products and services within their organizations. For additional information on Strategic Commercial Contracts, see Note 4.
Revenue from U.S. commercial customers was $1.5 billion for the year ended December 31, 2025 compared to $702.3 million for the same period in 2024, a 109% increase. Generally, increases in revenue from our existing customers are related to the increased adoption of our products and services within their organizations. For additional information on Strategic Commercial Contracts, see Note 4.
(2) The contractual commitment amounts under operating leases in the table above are primarily related to facility and equipment leases. Operating lease commitments are reflected net of $86.2 million of sublease income from tenants in certain of our leased facilities and $68.8 million of imputed interest. Refer to Note 7.
(2) The contractual commitment amounts under operating leases in the table above are primarily related to facility and equipment leases. Operating lease commitments are reflected net of $71.4 million of sublease income from tenants in certain of our leased facilities and $63.2 million of imputed interest. Refer to Note 7.
As of December 31, 2024, the total remaining deal value of the contracts that we had been awarded by government agencies in the United States and allied countries around the world, including existing contractual obligations and contractual options available to those government agencies, was $2.3 billion, up 30% from December 31, 2023, when the total value of such contracts was $1.8 billion.
As of December 31, 2025, the total remaining deal value of the contracts that we had been awarded by government agencies in the United States and allied countries around the world, including existing contractual obligations and contractual options available to those government agencies, was $4.4 billion, up 90% from December 31, 2024, when the total value of such contracts was $2.3 billion.
Research and development costs primarily include salaries, stock-based compensation expense, and benefits for personnel involved in performing the activities to develop and refine our platforms and products, as well as third-party cloud hosting services and other IT-related costs, travel costs, and allocated overhead.
Research and development costs primarily include salaries, stock-based compensation expense, and benefits for personnel involved in performing the activities to develop and refine our platforms and products, as well as third-party cloud hosting services and other IT-related costs. Research and development costs are expensed as incurred.
Of our total remaining deal value, as of December 31, 2024, the total remaining deal value of the contracts that we entered into with commercial customers, including existing contractual obligations and available contractual options, as defined above, was $3.1 billion, up 47% from December 31, 2023, when the total remaining deal value of such contracts was $2.1 billion.
Of our total remaining deal value, as of December 31, 2025, the total remaining deal value of the contracts that we entered into with commercial customers, including existing contractual obligations and available contractual options, as defined above, was $6.8 billion, up 117% from December 31, 2024, when the total remaining deal value of such contracts was $3.1 billion.
Sales and marketing costs primarily include salaries, stock-based compensation expense, variable compensation, including commissions, and benefits for our sales force and personnel involved in sales functions, executing on pilots, including bootcamps, and customer growth activities; as well as third-party cloud hosting services for our pilots, marketing and sales event-related costs, travel costs, and allocated overhead.
Sales and marketing costs primarily include salaries, stock-based compensation expense, variable compensation, including commissions, and benefits for our sales force and personnel involved in sales 72 Table of Contents functions, executing on pilots, and customer growth activities; as well as third-party cloud hosting services for our pilots, and marketing and sales event-related costs.
For the year ended December 31, 2024, such impacts were not material to our financial position or results of operations. Customer Impacts Current macroeconomic conditions have impacted, and may continue to adversely impact, our customers’ businesses, particularly our early- and growth-stage customers.
For the year ended December 31, 2025, such impacts were not material to our financial position or results of operations. Customer Impacts Macroeconomic conditions have impacted, and may continue to adversely impact, our customers’ businesses.
Research and development costs are expensed as incurred. 71 Table of Contents We plan to continue to invest in personnel to support our research and development efforts. As a result, we expect that research and development expenses will increase in absolute dollars for the foreseeable future as we continue to invest to support these activities.
We plan to continue to invest in personnel to support our research and development efforts. As a result, we expect that research and development expenses will increase in absolute dollars for the foreseeable future as we continue to invest to support these activities.
The increase was primarily due to increases of $63.7 million in stock-based compensation expense and related expenses and $11.6 million in travel costs. For additional information related to stock-based compensation expense, see the section titled “Stock-Based Compensation” below.
The increase was primarily due to increases of $22.7 million in stock-based compensation expense and related expenses, and $19.4 million in payroll and other payroll-related costs. For additional information related to stock-based compensation expense, see the section titled “Stock-Based Compensation” below.
Interest Income Years Ended December 31, Change 2024 2023 Amount Interest income $ 196,792 $ 132,572 $ 64,220 Interest income increased by $64.2 million for the year ended December 31, 2024 compared to 2023 primarily due to an increase in our interest-bearing cash, cash equivalents, and investments in short-term U.S. Treasury securities.
Interest Income Years Ended December 31, Change 2025 2024 Amount Interest income $ 229,181 $ 196,792 $ 32,389 Interest income increased by $32.4 million for the year ended December 31, 2025 compared to 2024 primarily due to an increase in our interest-bearing cash, cash equivalents, and investments in short-term U.S. Treasury securities.
As of December 31, 2024, the total remaining deal value of the contracts, as defined above, was $5.4 billion, up 40% from December 31, 2023, when our total remaining deal value of such contracts was $3.9 billion.
As of December 31, 2025, the total remaining deal value of the contracts, as defined above, was $11.2 billion, up 105% from December 31, 2024, when our total remaining deal value of such contracts was $5.4 billion.
Revenue from government customers increased by $347.4 million, or 28%, for the year ended December 31, 2024 compared to 2023. Of the increase, $280.7 million was from government customers existing as of December 31, 2023. Revenue from U.S. government customers was $1.2 billion for the year ended December 31, 2024 compared to $921.2 million for the same period in 2023.
Revenue from government customers increased by $832.7 million, or 53%, for the year ended December 31, 2025 compared to 2024. Of the increase, $774.0 million was from government customers existing as of December 31, 2024. Revenue from U.S. government customers was $1.9 billion for the year ended December 31, 2025 compared to $1.2 billion for the same period in 2024.
The following table summarizes our cash flows for the periods indicated (in thousands): Years Ended December 31, 2024 2023 2022 Net cash provided by (used in): Operating activities $ 1,153,865 $ 712,183 $ 223,737 Investing activities (340,655) (2,711,180) (45,427) Financing activities 463,364 218,839 85,996 Effect of foreign exchange on cash, cash equivalents, and restricted cash (6,745) 2,930 (3,885) Net increase (decrease) in cash, cash equivalents, and restricted cash $ 1,269,829 $ (1,777,228) $ 260,421 76 Table of Contents Operating Activities Net cash provided by operating activities was $1.2 billion and $712.2 million for the year ended December 31, 2024 and 2023, respectively.
The following table summarizes our cash flows for the periods indicated (in thousands): Years Ended December 31, 2025 2024 2023 Net cash provided by (used in): Operating activities $ 2,134,473 $ 1,153,865 $ 712,183 Investing activities (2,783,551) (340,655) (2,711,180) Financing activities (26,910) 463,364 218,839 Effect of foreign exchange on cash, cash equivalents, and restricted cash 7,477 (6,745) 2,930 Net increase (decrease) in cash, cash equivalents, and restricted cash $ (668,511) $ 1,269,829 $ (1,777,228) Operating Activities Net cash provided by operating activities was $2.1 billion and $1.2 billion for the year ended December 31, 2025 and 2024, respectively.
Gross Profit and Gross Margin, Excluding Stock-Based Compensation The following table provides a reconciliation of gross profit and gross margin, excluding stock-based compensation for the years ended December 31, 2024 and 2023 (in thousands, except percentages): Years Ended December 31, 2024 2023 Gross profit $ 2,299,517 $ 1,793,907 Add: stock-based compensation 69,065 35,995 Gross profit, excluding stock-based compensation $ 2,368,582 $ 1,829,902 Gross margin, excluding stock-based compensation 83 % 82 % Adjusted Income from Operations The following table provides a reconciliation of adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes for the years ended December 31, 2024 and 2023 (in thousands): Years Ended December 31, 2024 2023 Income from operations $ 310,403 $ 119,966 Add: stock-based compensation 691,638 475,903 Add: employer payroll taxes related to stock-based compensation 126,021 36,907 Adjusted income from operations $ 1,128,062 $ 632,776 Adjusted operating margin 39 % 28 % 70 Table of Contents Components of Results of Operations Revenue We generate revenue from the sale of subscriptions to access our software platforms in our hosted environment along with ongoing O&M services (“Palantir Cloud”), software subscriptions in our customers’ environments with ongoing O&M services (“On-Premises Software”), and professional services.
Gross Profit and Gross Margin, Excluding Stock-Based Compensation The following table provides a reconciliation of gross profit and gross margin, excluding stock-based compensation for the years ended December 31, 2025 and 2024 (in thousands, except percentages): Years Ended December 31, 2025 2024 Gross profit $ 3,686,269 $ 2,299,517 Add: stock-based compensation 64,555 69,065 Gross profit, excluding stock-based compensation $ 3,750,824 $ 2,368,582 Gross margin, excluding stock-based compensation 84 % 83 % 71 Table of Contents Adjusted Income from Operations The following table provides a reconciliation of adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes for the years ended December 31, 2025 and 2024 (in thousands, except percentages): Years Ended December 31, 2025 2024 Income from operations $ 1,414,015 $ 310,403 Add: stock-based compensation 684,033 691,638 Add: employer payroll taxes related to stock-based compensation 156,052 126,021 Adjusted income from operations $ 2,254,100 $ 1,128,062 Adjusted operating margin 50 % 39 % Components of Results of Operations Revenue We generate revenue from the sale of subscriptions to access our software platforms in our hosted environment along with ongoing O&M services (“Palantir Cloud”), software subscriptions in our customers’ environments with ongoing O&M services (“On-Premises Software”), and professional services.
For additional information see Note 11. Income Taxes in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Liquidity and Capital Resources We generated positive cash flow from operations for the year ended December 31, 2024. We had cash, cash equivalents, and short-term U.S. Treasury securities totaling $5.2 billion available as of December 31, 2024.
For additional information see Note 11. Taxes in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Liquidity and Capital Resources As of December 31, 2025, our principal sources of liquidity were cash, cash equivalents, and short-term U.S. Treasury securities totaling $7.2 billion.
Non-GAAP Reconciliations We use the non-GAAP measures contribution margin; gross profit and gross margin, excluding stock-based compensation; and adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes, to help us evaluate our business, identify trends affecting our business, formulate business plans and financial projections, and make strategic decisions.
For more information about contribution margin, including the limitations of this measure, and a reconciliation to income from operations, see the section titled “Non-GAAP Reconciliations” below. 70 Table of Contents Non-GAAP Reconciliations We use the non-GAAP measures contribution margin; gross profit and gross margin, excluding stock-based compensation; and adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes, to help us evaluate our business, identify trends affecting our business, formulate business plans and financial projections, and make strategic decisions.
However, many of our contracts are subject to termination provisions, including 67 Table of Contents for convenience, and there can be no guarantee that contracts are not terminated or that contract options will be exercised.
Total remaining deal value presumes the exercise of all contract options available to our customers and no termination of contracts. However, many of our contracts are subject to termination provisions, including for convenience, and there can be no guarantee that contracts are not terminated or that contract options will be exercised.
Professional services contracts typically include the provision of on-demand professional services for the duration of the contractual term, which may be coterminous or non-coterminous with a Palantir Cloud subscription or the On-Premises Software.
Professional services contracts typically include the provision of on-demand professional services for the duration of the contractual term, which may be coterminous or non-coterminous with a Palantir Cloud subscription or the On-Premises Software. Professional services are on-demand, whereby we perform services throughout the service period; therefore, the revenue is recognized over the related term.
Revenue from commercial customers increased by $293.1 million, or 29%, for the year ended December 31, 2024 compared to 2023. Of the increase, $190.7 million was from commercial customers existing as of December 31, 2023, including a decrease of $35.0 million of revenue from Strategic Commercial Contracts.
Revenue from commercial customers increased by $777.3 million, or 60%, for the year ended December 31, 2025 compared to 2024. Of the increase, $425.2 million was from commercial customers existing as of December 31, 2024, including a decrease of $37.0 million of revenue from Strategic Commercial Contracts.
The increase was primarily due to increases of $111.4 million in stock-based compensation expense and related expenses, $13.9 million in third-party cloud hosting services, and $12.9 million in payroll and other payroll-related costs. 74 Table of Contents For additional information related to stock-based compensation expense, see the section titled “Stock-Based Compensation” below.
The increase was primarily due to increases of $76.4 million in payroll and other payroll-related costs, $18.3 million in marketing expenses, and $16.4 million in stock-based compensation expense and related expenses. 75 Table of Contents For additional information related to stock-based compensation expense, see the section titled “Stock-Based Compensation” below.
For additional information related to stock-based compensation expense, see the section titled “Stock-Based Compensation” below. General and Administrative General and administrative expenses increased by $69.2 million, or 13%, for the year ended December 31, 2024 compared to 2023.
These were partially offset by a decrease of $19.8 million in stock-based compensation expense and related expenses For additional information related to stock-based compensation expense, see the section titled “Stock-Based Compensation” below. General and Administrative General and administrative expenses increased by $64.2 million, or 11%, for the year ended December 31, 2025 compared to 2024.
Contribution Margin The following table provides a reconciliation of contribution margin for the years ended December 31, 2024 and 2023 (in thousands, except percentages): Years Ended December 31, 2024 2023 Income from operations $ 310,403 $ 119,966 Add: Research and development expenses (1) 342,813 306,560 General and administrative expenses (1) 375,094 343,126 Total stock-based compensation expense 691,638 475,903 Total contribution $ 1,719,948 $ 1,245,555 Contribution margin 60 % 56 % ———— (1) Excludes stock-based compensation.
Contribution Margin The following table provides a reconciliation of contribution margin for the years ended December 31, 2025 and 2024 (in thousands, except percentages): Years Ended December 31, 2025 2024 Income from operations $ 1,414,015 $ 310,403 Add: Research and development expenses (1) 420,838 342,813 General and administrative expenses (1) 423,811 375,094 Total stock-based compensation expense 684,033 691,638 Total contribution $ 2,942,697 $ 1,719,948 Contribution margin 66 % 60 % ———— (1) Excludes stock-based compensation.
Geopolitical Tensions Our business operations are subject to interruption by events that are beyond our control, including geopolitical tensions. We continue to closely monitor the impact of various geopolitical tensions and their global impacts on our business.
We continue to closely monitor the impact of various geopolitical tensions and their global impacts on our business.
Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. For further information, see Note 2. Significant Accounting Policies in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
We believe that the accounting policies described below involve a significant degree of judgment and complexity. Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. For further information, see Note 2.
Our proximity to these businesses and the industries in which they are operating has enhanced, and is expected to continue enhancing, our own product and business development efforts, as we continue expanding access to our platforms to the broadest possible set of customers.
Our proximity to these businesses and the industries in which they are operating has enhanced, and is expected to continue enhancing, our own product and business development efforts, as we continue expanding access to our platforms to the broadest possible set of customers. 68 Table of Contents Total Remaining Deal Value We are focused on building strategic relationships with, and delivering significant outcomes for, our customers over the long term.
Macroeconomic Trends As a corporation with an international presence, we are subject to risks and uncertainties caused by significant events with macroeconomic impacts, including, but not limited to, geopolitical tensions, heightened interest rates, monetary policy changes, and foreign currency fluctuations. Additionally, these macroeconomic impacts have disrupted, and may continue to disrupt, the operations of our customers and prospective customers.
Macroeconomic Trends As a corporation with an international presence, we are subject to risks and uncertainties caused by significant events with macroeconomic impacts, including, but not limited to, geopolitical tensions, fluctuating interest rates, monetary policy changes, foreign currency fluctuations, and the potential or actual imposition of tariffs or other impacts on trade relations.
In accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , we recognized revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for promised goods or services.
Revenue Recognition We generate revenue from the sale of subscriptions to access our software platforms via Palantir Cloud and On-Premises Software, with ongoing O&M services and professional services. 78 Table of Contents In accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , we recognized revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for promised goods or services.
Treasury securities compared to the prior year. Financing Activities Net cash provided by financing activities was $463.4 million and $218.8 million for the year ended December 31, 2024 and 2023, respectively, each of which primarily consisted of proceeds from the exercise of common stock options.
Financing Activities Net cash used in financing activities was $26.9 million for the year ended December 31, 2025 and net cash provided by financing activities was $463.4 million for the year ended December 31, 2024. Financing cash inflows consisted primarily of proceeds from the exercise of common stock options.
Research and Development Research and development expenses increased by $103.3 million, or 26%, for the year ended December 31, 2024 compared to 2023. The increase was primarily due to increases of $87.4 million in stock-based compensation expense and related expenses and $17.5 million in third-party cloud hosting services.
Research and Development Research and development expenses increased by $49.8 million, or 10%, for the year ended December 31, 2025 compared to 2024. The increase was primarily due to increases of $35.6 million in third-party cloud hosting services and $19.0 million in payroll and other payroll-related costs.
Cost of Revenue and Gross Profit Years Ended December 31, Change 2024 2023 Amount % Cost of revenue $ 565,990 $ 431,105 $ 134,885 31 % Gross profit 2,299,517 1,793,907 505,610 28 % Gross margin 80 % 81 % Cost of revenue for the year ended December 31, 2024 increased by $134.9 million, or 31%, compared to 2023.
Cost of Revenue and Gross Profit Years Ended December 31, Change 2025 2024 Amount % Cost of revenue $ 789,177 $ 565,990 $ 223,187 39 % Gross profit 3,686,269 2,299,517 1,386,752 60 % Gross margin 82 % 80 % Cost of revenue for the year ended December 31, 2025 increased by $223.2 million, or 39%, compared to 2024.
To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected. We believe that the accounting policies described below involve a significant degree of judgment and complexity.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.
The increase was primarily driven by the growth of our business and timing of payments to vendors. Investing Activities Net cash used in investing activities was $340.7 million and $2.7 billion for the year ended December 31, 2024 and 2023, respectively. The decrease in cash used in investing activities was primarily due to increased proceeds from maturities of short-term U.S.
The increase was primarily driven by revenue growth and timing of payments from customers, partially offset by timing of billings to customers. Investing Activities Net cash used in investing activities was $2.8 billion and $0.3 billion for the year ended December 31, 2025 and 2024, respectively.
Foreign Currency Exchange Rates Exchange rates are subject to significant and rapid fluctuations due to a number of factors, including interest rate changes, monetary policy changes, and political and economic uncertainty which may adversely affect our results of operations or financial position. Our contracts with customers and vendors are primarily denominated in U.S. dollars.
If the respective conflicts continue or worsen, leading to greater disruptions and uncertainty within the technology industry or global economy, our business and results of operations could be negatively impacted. 69 Table of Contents Foreign Currency Exchange Rates Exchange rates are subject to significant and rapid fluctuations due to a number of factors, including interest rate changes, monetary policy changes, and political and economic uncertainty which may adversely affect our results of operations or financial position.
As such, we may seek additional equity or debt financing on an as needed or opportunistic basis. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all.
In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If additional funds are not available to us on acceptable terms, or at all, our business, financial condition, and results of operations could be adversely affected.
During the year ended December 31, 2024, the Company repurchased and subsequently retired 2.1 million shares of its Class A common stock for an aggregate amount, including commissions, of $64.2 million under our Share Repurchase Program. As of December 31, 2024, approximately $935.8 million of the originally authorized amount under our Share Repurchase Program remained available for future repurchases.
During the year ended December 31, 2025, the Company repurchased and subsequently retired 0.6 million shares of its Class A common stock for an aggregate amount, including commissions, of $75.0 million under our Share Repurchase Program. In January 2026, the Company terminated the Share Repurchase Program. For additional information on our Share Repurchase Program, see Note 9.
Total remaining deal value is the total remaining value, as of the end of the reporting period, of contracts that have been entered into with, or awarded by, our customers. Total remaining deal value presumes the exercise of all contract options available to our customers and no termination of contracts.
Our contracts with our customers reflect that long-term orientation, often lasting for multiple years at a time. Total remaining deal value is the total remaining value, as of the end of the reporting period, of contracts that have been entered into with, or awarded by, our customers.
We do not currently have office locations in Russia or Palestinian territories and none of our revenues came from sales to entities headquartered in those countries or territories. In 2023, we announced partnerships with Ukraine to support its defense and reconstruction efforts and investigations of potential war crimes, among other activities.
We do not currently have office locations in Russia or Palestinian territories and none of our revenues came from sales to entities headquartered in those countries or territories. Our current operations related to Ukraine and Israel are not material to our financial position or results of operations.
Other Income (Expense), Net Years Ended December 31, Change 2024 2023 Amount Other income (expense), net $ (18,022) $ (15,447) $ (2,575) Other income (expense), net changed by $2.6 million for the year ended December 31, 2024 compared to 2023 primarily due to an increase in net realized and unrealized losses from our shares held in equity securities. 75 Table of Contents Provision for Income Taxes Years Ended December 31, Change 2024 2023 Amount Provision for income taxes $ 21,255 $ 19,716 $ 1,539 Provision for income taxes increased by $1.5 million for the year ended December 31, 2024 compared to 2023 primarily due to the increased foreign tax expense as the result of higher foreign taxable income and withholding taxes.
Other Income (Expense), Net Years Ended December 31, Change 2025 2024 Amount Other income (expense), net $ 14,172 $ (18,022) $ 32,194 Other income (expense), net changed by $32.2 million for the year ended December 31, 2025 compared to 2024 primarily due to upward adjustments in privately-held securities and lower realized losses from marketable securities, partially offset by an increase in unrealized losses on marketable securities. 76 Table of Contents Provision for Income Taxes Years Ended December 31, Change 2025 2024 Amount Provision for income taxes $ 22,724 $ 21,255 $ 1,469 The increase in the provision for income taxes was not material for the year ended December 31, 2025 compared to 2024.
Professional services are on-demand, whereby we perform services throughout the service period; therefore, the revenue is recognized over the related term. 78 Table of Contents Areas of Judgment and Estimation Our contracts with customers can include multiple promises to transfer goods or services to the customer.
Areas of Judgment and Estimation Our contracts with customers can include multiple promises to transfer goods or services to the customer.
Operating Expenses Years Ended December 31, Change 2024 2023 Amount % Sales and marketing $ 887,755 $ 744,992 $ 142,763 19 % Research and development 507,878 404,624 103,254 26 % General and administrative 593,481 524,325 69,156 13 % Total operating expenses $ 1,989,114 $ 1,673,941 $ 315,173 19 % Sales and Marketing Sales and marketing expenses increased by $142.8 million, or 19%, for the year ended December 31, 2024 compared to 2023.
Operating Expenses Years Ended December 31, Change 2025 2024 Amount % Sales and marketing $ 1,056,859 $ 887,755 $ 169,104 19 % Research and development 557,677 507,878 49,799 10 % General and administrative 657,718 593,481 64,237 11 % Total operating expenses $ 2,272,254 $ 1,989,114 $ 283,140 14 % Sales and Marketing Sales and marketing expenses increased by $169.1 million, or 19%, for the year ended December 31, 2025 compared to 2024.
We continuously monitor the direct and indirect impacts of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape. See the section titled “Risk Factors” included elsewhere in this Annual Report on Form 10-K for further discussion of the impact of macroeconomic trends on our business.
See the section titled “Risk Factors” included elsewhere in this Annual Report on Form 10-K for further discussion of the impact of macroeconomic trends on our business. Geopolitical Tensions Our business operations are subject to interruption by events that are beyond our control, including geopolitical tensions.
Treasury securities, and restricted cash balances. Other Income (Expense), Net Other income (expense), net consists primarily of realized and unrealized losses from equity securities and foreign currency exchange gains and losses. The year ended December 31, 2022 also included a gain from a step acquisition.
Treasury securities, and restricted cash balances. Other Income (Expense), Net Other income (expense), net consists primarily of realized and unrealized losses from equity securities and foreign currency exchange gains and losses. Provision for Income Taxes Provision for income taxes consists of income taxes related to foreign and state jurisdictions in which we conduct business and withholding taxes.
Provision for Income Taxes Provision for income taxes consists of income taxes related to foreign and state jurisdictions in which we conduct business and withholding taxes. Net Income Attributable to Noncontrolling Interests Net income attributable to noncontrolling interests represents the share of income (loss) that is not attributable to the Company.
Net Income Attributable to Noncontrolling Interests Net income attributable to noncontrolling interests represents the share of income that is not attributable to the Company.
Our customer deposits and customer deposits, noncurrent as of December 31, 2023 were $209.8 million and $1.5 million, respectively. 77 Table of Contents Critical Accounting Policies and Estimates Our consolidated financial statements and the accompanying notes thereto included elsewhere in this Annual Report on Form 10-K are prepared in accordance with GAAP.
Critical Accounting Policies and Estimates Our consolidated financial statements and the accompanying notes thereto included elsewhere in this Annual Report on Form 10-K are prepared in accordance with GAAP. The preparation of consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures.
Stock-Based Compensation Years Ended December 31, Change 2024 2023 Amount % Cost of revenue $ 69,065 $ 35,995 $ 33,070 92 % Sales and marketing 239,121 160,645 78,476 49 % Research and development 165,065 98,064 67,001 68 % General and administrative 218,387 181,199 37,188 21 % Total stock-based compensation expense $ 691,638 $ 475,903 $ 215,735 45 % Stock-based compensation expenses increased by $215.7 million, or 45%, for the year ended December 31, 2024 compared to 2023.
Stock-Based Compensation Years Ended December 31, Change 2025 2024 Amount % Cost of revenue $ 64,555 $ 69,065 $ (4,510) (7) % Sales and marketing 248,732 239,121 9,611 4 % Research and development 136,839 165,065 (28,226) (17) % General and administrative 233,907 218,387 15,520 7 % Total stock-based compensation expense $ 684,033 $ 691,638 $ (7,605) (1) % Stock-based compensation expenses decreased by $7.6 million, or 1%, for the year ended December 31, 2025 compared to 2024.
Further, we may enter into future arrangements to acquire or invest in businesses, products, services, strategic partnerships, and technologies; additionally, we have, and may in the future, repurchase shares of our Class A common stock from time to time under our Share Repurchase Program.
Further, we may enter into future arrangements to acquire or invest in businesses, products, services, strategic partnerships, and technologies. As such, we may seek additional equity or debt financing on an as needed or opportunistic basis.
Contractual Obligations and Commitments The following table summarizes our contractual obligations and commitments as of December 31, 2024 (in thousands): Payments Due by Period Total Less than 1 year 1-3 years 3-5 years More than 5 years Noncancelable purchase commitments (1) $ 2,001,637 $ 125,242 $ 419,909 $ 549,986 $ 906,500 Operating lease commitments, net of sublease income amounts (2) 221,829 46,726 67,535 21,522 86,046 Total contractual obligations and commitments $ 2,223,466 $ 171,968 $ 487,444 $ 571,508 $ 992,546 ————— (1) Noncancelable purchase commitments primarily relate to purchase commitments for third-party cloud hosting services and represents only contracts which are enforceable and legally binding.
Financing cash outflows were driven by taxes paid in the current year related to the net share settlement of SARs during the year ended December 31, 2024 and repurchases of our Class A common stock. 77 Table of Contents Material Cash Requirements The following table summarizes our contractual obligations and commitments, which are associated with agreements that are enforceable and legally binding, as of December 31, 2025 (in thousands): Payments Due by Period Total Less than 1 year 1-3 years 3-5 years More than 5 years Noncancelable purchase commitments (1) $ 1,758,951 $ 132,682 $ 515,169 $ 411,100 $ 700,000 Operating lease commitments, net of sublease income amounts (2) 221,098 48,293 53,090 37,754 81,961 Total contractual obligations and commitments $ 1,980,049 $ 180,975 $ 568,259 $ 448,854 $ 781,961 ————— (1) Noncancelable purchase commitments primarily relate to purchase commitments for third-party cloud hosting services and represents only contracts which are enforceable and legally binding.
Our gross margin for the year ended December 31, 2024 decreased from 81% for the same period in 2023 to 80% as a result of the growth of cost of revenue slightly outpacing revenue growth. For additional information related to stock-based compensation expense, see the section titled “Stock-Based Compensation” below.
For additional information related to stock-based compensation expense, see the section titled “Stock-Based Compensation” below.
We believe that cash flows generated from operations, available funds, and access to financing sources, including our undrawn credit facility, will be sufficient to meet our anticipated operating cash needs for at least the next twelve months. However, any projections of future cash needs and cash flows are subject to substantial uncertainty.
We generated positive cash flow from operations for the year ended December 31, 2025. We believe that we have sufficient liquidity to meet our operating requirements for at least the next twelve months and thereafter for the foreseeable future.
Removed
Total Remaining Deal Value We are focused on building strategic relationships with, and delivering significant outcomes for, our customers over the long term. Our contracts with our customers reflect that long-term orientation, often lasting for multiple years at a time.
Added
Additionally, these macroeconomic impacts have disrupted, and may continue to disrupt, the operations of our customers and prospective customers. We continuously monitor the direct and indirect impacts of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape.
Removed
In 2024, we agreed to a strategic partnership with the Israeli Defense Ministry to supply technology to Israel to assist in the ongoing war. However, our current operations related to Ukraine and Israel are not material to our financial position or results of operations.
Added
Our contracts with customers and vendors are primarily denominated in U.S. dollars.
Removed
If the respective conflicts continue or worsen, leading to greater disruptions and uncertainty within the technology industry or global economy, our business and results of operations could be negatively impacted.
Added
With economic uncertainty, we may experience additional negative impacts on new customer acquisition, customer renewals, and customer collections, among other things, which could negatively impact our business and results of operations.
Removed
Relationships with early- or growth-stage customers carry inherent risks because, among other things, such customers may be unable to generate sufficient revenues or profitability or to access any necessary financing or funding in a timely manner or on favorable terms to them in the current macroeconomic environment, which has impacted, and may continue to impact, our expected revenue and collections.
Added
These noncash or unallocated costs include stock-based compensation expense, research and development costs, and general and administrative costs.
Removed
As a result, current macroeconomic conditions have impacted, and may continue to impact, our ability to realize the full value of our commercial contracts with such early- or growth-stage customers.
Added
The increase was primarily due to increases of $94.6 million in third-party cloud hosting services, $38.0 million in subcontractor expenses, $29.1 million in field-service representatives, and $26.9 million in payroll and other payroll-related costs. Our gross margin for the year ended December 31, 2025 increased from 80% for the same period in 2024 to 82%.
Removed
For more information about contribution margin, including the limitations of this measure, and a reconciliation to income from operations, see the section titled “Non-GAAP Reconciliations” below.
Added
The decrease was driven by reductions in expense from SARs that fully vested and expensed during the year ended December 31, 2024, partially offset by expense from new grants awarded since and within the year ended December 31, 2024, including RSUs, P-RSUs, and SARs.
Removed
The increase was primarily due to increases of $56.6 million in subcontractor expenses, $42.3 million in stock-based compensation expense and related expenses, and $37.4 million in third-party cloud hosting services.
Added
We continue to evaluate our liquidity and capital resources, including our access to external capital, to ensure we can finance future capital requirements.
Removed
The increase was primarily driven by the acceleration of $115.8 million of expense for Market-Vesting SARs upon achieving the applicable market condition, as well as expense from new equity grants awarded since December 31, 2023, including grants for RSUs, P-RSUs, and SARs.
Added
The increase in cash used in investing activities was primarily due to more purchases of short-term U.S. Treasury securities and privately-held securities compared to the prior year, partially offset by sales and redemptions of marketable securities.
Removed
These were partially offset by a reduction in expense from equity awards that became fully vested, forfeitures, and lower expense under the accelerated attribution method for RSUs granted prior to September 30, 2020, the date we completed the direct listing of our Class A common stock on the NYSE.
Added
Debt in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. In August 2023, our Board of Directors authorized a stock repurchase program of up to $1.0 billion of our outstanding shares of Class A common stock (the “Share Repurchase Program”).
Removed
While we have generated income from operations and positive cash flows from operations in the year ended December 31, 2024, the amounts may fluctuate for the foreseeable future. As of December 31, 2024, our accumulated deficit balance was $5.2 billion, and our principal sources of liquidity were cash, cash equivalents, and short-term U.S. Treasury securities totaling $5.2 billion.
Added
Stockholders’ Equity in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe 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.
Biggest changeExternal 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). 62 Table of Contents 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.
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, 61 Table of Contents legal and compliance, where necessary in assessing and reviewing risks and identifying actions to be taken.
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.
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).
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.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, we lease various other office spaces throughout the world. 62 Table of Contents We believe that our existing facilities are adequate to meet current requirements, and that suitable additional or substitute space will be available as needed to accommodate any further physical expansion of operations and for any additional offices.
Biggest changeWe believe that our existing facilities are adequate to meet current requirements, and that suitable additional or substitute space will be available as needed to accommodate any further physical expansion of operations and for any additional offices.
ITEM 2. PROPERTIES Facilities We have leased principal properties in Denver, Colorado, which is the location of our corporate headquarters; in Palo Alto, California; New York City, New York; Washington, D.C.; and London, England.
ITEM 2. PROPERTIES Facilities We have leased principal properties in Denver, Colorado, which was the location of our corporate headquarters; in Palo Alto, California; New York City, New York; Washington, D.C.; and London, England. In addition, we lease various other office spaces throughout the world.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFor information on legal proceedings, refer to Note 8. Commitments and Contingencies—Litigation and Legal Proceedings in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 63 Table of Contents PART II
Biggest changeRegardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. 63 Table of Contents For information on legal proceedings, refer to Note 8. Commitments and Contingencies—Litigation and Legal Proceedings in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. ITEM 4.
The results of any litigation cannot be predicted with certainty, and an unfavorable resolution in any legal proceedings could materially affect our future business, results of operations, or financial condition. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
The results of any litigation cannot be predicted with certainty, and an unfavorable resolution in any legal proceedings could materially affect our future business, results of operations, or financial condition.
Added
MINE SAFETY DISCLOSURES Not applicable. 64 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

22 edited+5 added−3 removed24 unchanged
Biggest changeFor more information about our adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes; and gross profit and gross margin, when excluding stock-based compensation; as well as reconciliations from income (loss) from operations and gross profit, see the section titled “Non-GAAP Reconciliations” below.
Biggest changeIn the year ended December 31, 2024, our gross profit was $2.3 billion, reflecting a gross margin of 80%, or 83% when excluding stock-based compensation. 67 Table of Contents For more information about our adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes; and gross profit and gross margin, when excluding stock-based compensation; as well as reconciliations from income from operations and gross profit, see the section titled “Non-GAAP Reconciliations” below.
Stockholders’ Equity in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. 64 Table of Contents Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.
Stockholders’ Equity in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. 65 Table of Contents Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock and in each index at the market close on September 30, 2020, and its relative performance is tracked through December 31, 2024. The returns shown are based on historical results and are not intended to suggest future performance.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock and in each index at the market close on September 30, 2020, and its relative performance is tracked through December 31, 2025. The returns shown are based on historical results and are not intended to suggest future performance.
For example, while the U.S. Food and Drug Administration, Centers for Disease Control and Prevention, and National Institutes of Health are subsidiary agencies of the U.S. Department of Health and Human Services, we treat each of those agencies as a separate customer given that the governing structures and procurement processes of each agency are independent.
Food and Drug Administration, Centers for Disease Control and Prevention, and National Institutes of Health are subsidiary agencies of the U.S. Department of Health and Human Services, we treat each of those agencies as a separate customer given that the governing structures and procurement processes of each agency are independent.
Our historical results are not necessarily indicative of the results that may be expected for any period in the future. This section of this Annual Report on Form 10-K generally discusses fiscal years 2024 and 2023 items and year-to-year comparisons between fiscal years 2024 and 2023.
Our historical results are not necessarily indicative of the results that may be expected for any period in the future. This section of this Annual Report on Form 10-K generally discusses fiscal years 2025 and 2024 items and year-to-year comparisons between fiscal years 2025 and 2024.
Our Customers We define a customer as an organization from which we have recognized revenue during the trailing twelve-month period. During the period ended December 31, 2024, we had 711 customers, including companies in various commercial sectors and government agencies around the world.
Our Customers We define a customer as an organization from which we have recognized revenue during the trailing twelve-month period. During the period ended December 31, 2025, we had 954 customers, including companies in various commercial sectors and government agencies around the world. During the period ended December 31, 2024, we had 711 customers.
Overview We build software that empowers organizations to effectively integrate their data, decisions, and operations at scale. 65 Table of Contents We were founded in 2003 and started building software for the intelligence community in the United States to assist in counterterrorism investigations and operations.
Overview We build software that empowers organizations to effectively integrate their data, decisions, and operations at scale. 66 Table of Contents We were founded in 2003 and started building software for the intelligence community in the United States to assist in counterterrorism investigations and operations.
Discussions of fiscal year 2023 items and year-to-year comparisons between fiscal years 2023 and 2022 that are not included in this Annual Report on Form 10-K can be found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 20, 2024 and is incorporated herein by reference.
Discussions of fiscal year 2024 items and year-to-year comparisons between fiscal years 2024 and 2023 that are not included in this Annual Report on Form 10-K can be found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on February 18, 2025 and is incorporated herein by reference.
The following graph compares the cumulative total return to stockholders on our Class A common stock since September 30, 2020 (the date our Class A common stock commenced trading on the NYSE) relative to the cumulative total returns of the Standard & Poor’s 500 Index and the Standard & Poor’s Information Technology Index over the same period.
The following graph compares the cumulative total return to stockholders on our Class A common stock since September 30, 2020 (the date our Class A common stock commenced trading on the New York Stock Exchange relative to the cumulative total returns of the Standard & Poor’s 500 Index and the Standard & Poor’s Information Technology Index over the same period.
We manage customers at the account level, not by industry or sector, so that we can optimize on the specific growth opportunities for each customer. In the year ended December 31, 2024, 55% of our revenue came from government customers and 45% came from commercial customers. Our U.S. customers have been a meaningful source of revenue growth for our business.
We manage customers at the account level, not by industry or sector, so that we can optimize on the specific growth opportunities for each customer. In the year ended December 31, 2025, 54% of our revenue came from government customers and 46% came from commercial customers. Our U.S. customers have been a meaningful source of revenue growth for our business.
We have built lasting and significant customer relationships and partnerships with some of the world’s leading government institutions and companies. As of December 31, 2024, we expect to generate revenue from contracts closed during the three months and year ended December 31, 2024 for an additional 4.7 and 3.6 years, respectively, on a dollar-weighted average contract duration basis.
We have built lasting and significant customer relationships and partnerships with some of the world’s leading government institutions and companies. As of December 31, 2025, we expect to generate revenue from contracts closed during each of the three months and year ended December 31, 2025 for an additional four years, on a dollar-weighted average contract duration basis.
In the year ended December 31, 2024, we generated income from operations of $310.4 million, or adjusted income from operations of $1.1 billion when excluding stock-based compensation and related employer payroll taxes.
In the year ended December 31, 2025, we generated income from operations of $1.4 billion, or adjusted income from operations of $2.3 billion when excluding stock-based compensation and related employer payroll taxes.
Our average revenue for the top twenty customers during the trailing twelve months ended December 31, 2024 was $64.6 million, which grew 18% from an average of $54.6 million in revenue from the top twenty customers during the trailing twelve months ended December 31, 2023, demonstrating our expanding relationships with existing customers.
Our average revenue for the top twenty customers during the trailing twelve months ended December 31, 2025 was $93.9 million, which grew 45% from an average of $64.6 million in revenue from the top twenty customers during the trailing twelve months ended December 31, 2024, demonstrating our expanding relationships with existing customers.
For the year ended December 31, 2024, we generated $2.9 billion in revenue, reflecting a 29% growth rate from the year ended December 31, 2023, when we generated $2.2 billion in revenue.
For the year ended December 31, 2025, we generated $4.5 billion in revenue, reflecting a 56% growth rate from the year ended December 31, 2024, when we generated $2.9 billion in revenue.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information for Common Stock Effective November 26, 2024, our Class A common stock was listed and began trading on The Nasdaq Stock Market LLC (Nasdaq Global Market Select) under the symbol “PLTR”.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information for Common Stock Our Class A common stock trades on The Nasdaq Stock Market LLC (Nasdaq Global Market Select) under the symbol “PLTR”.
In the year ended December 31, 2024, we generated 66% of our revenue from customers in the United States and the remaining 34% from non-U.S. customers. Revenue from our U.S. customers during the trailing twelve months ended December 31, 2024 was $1.9 billion, which grew 38% from the prior twelve-month period.
In the year ended December 31, 2025, we generated 74% of our revenue from customers in the United States and the remaining 26% from non-U.S. customers. Revenue from our U.S. customers during the trailing twelve months ended December 31, 2025 was $3.3 billion, which grew 75% from the prior twelve-month period.
In the year ended December 31, 2023, we generated income from operations of $120.0 million, or adjusted income from operations of $632.8 million when excluding stock-based compensation and related employer payroll taxes. In the year ended December 31, 2024, our gross profit was $2.3 billion, reflecting a gross margin of 80%, or 83% when excluding stock-based compensation.
In the year ended December 31, 2024, we generated income from operations of $310.4 million, or adjusted income from operations of $1.1 billion when excluding stock-based compensation and related employer payroll taxes. In the year ended December 31, 2025, our gross profit was $3.7 billion, reflecting a gross margin of 82%, or 84% when excluding stock-based compensation.
Holders of Record As of February 10, 2025, there were 1,678 holders of record of our Class A common stock, 22 holders of record of our Class B common stock, and one holder of record of our Class F common stock.
Holders of Record As of February 10, 2026, there were 2,178 holders of record of our Class A common stock, 16 holders of record of our Class B common stock, and one holder of record of our Class F common stock.
During the year ended December 31, 2024, we repurchased 2,123,131 shares of our Class A common stock under the Share Repurchase Program. For additional information see Note 9.
During the year ended December 31, 2025, we repurchased 600,446 shares of our Class A common stock under the Share Repurchase Program. The Share Repurchase Program was terminated in January 2026. For additional information see Note 9.
During the period ended December 31, 2023, we had 497 customers. 66 Table of Contents For large government agencies, where a single institution has multiple divisions, units, or subsidiary agencies, each such division, unit, or subsidiary agency that enters into a separate contract with us and is invoiced as a separate entity is treated as a separate customer.
For large government agencies, where a single institution has multiple divisions, units, or subsidiary agencies, each such division, unit, or subsidiary agency that enters into a separate contract with us and is invoiced as a separate entity is treated as a separate customer. For example, while the U.S.
Issuer Purchases of Equity Securities The following table summarizes stock repurchases during the three months ended December 31, 2024 (in thousands, except share and per share amounts): Period Total Number of Shares Purchased Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1, 2024 - October 31, 2024 164,669 $ 41.90 164,669 $ 947,503 November 1, 2024 - November 30, 2024 93,830 $ 57.55 93,830 $ 942,103 December 1, 2024 - December 31, 2024 84,276 $ 74.74 84,276 $ 935,804 Total (2) 342,775 342,775 ————— (1) Includes related commissions.
Issuer Purchases of Equity Securities The following table summarizes stock repurchases during the three months ended December 31, 2025 (in thousands, except share and per share amounts): Period Total Number of Shares Purchased Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) October 1, 2025 - October 31, 2025 37,533 $ 183.79 37,533 $ 873,117 November 1, 2025 - November 30, 2025 32,630 $ 174.65 32,630 $ 867,418 December 1, 2025 - December 31, 2025 36,008 $ 183.26 36,008 $ 860,819 Total 106,171 106,171 ————— (1) Includes related commissions.
We later began working with commercial enterprises, who often faced fundamentally similar challenges in working with data. We have built four principal software platforms, Gotham, Foundry, Apollo, and our Artificial Intelligence Platform (“AIP”).
We later began working with commercial enterprises, who often faced fundamentally similar challenges in working with data. We have built four principal software platforms, Gotham, Foundry, Apollo, and AIP. Foundry is our foundational data operations platform, which provides the core capabilities for data management, logic authoring, systemic mapping development through our Ontology, analytics, and workflow development.
Removed
From September 30, 2020 through November 25, 2024, our Class A common stock was listed on the NYSE under the symbol “PLTR”. Prior to September 30, 2020, there was no public trading market for our Class A common stock.
Added
AIP is our generative AI platform, which provides secure connectivity to third-party-provided LLMs, a development toolchain for building AI-powered agents and automations, an array of AI-enabled end user applications, a broad evaluations framework for governing AI workflows in production, and more.
Removed
Gotham and Foundry enable institutions to transform massive amounts of information into an integrated data asset that reflects their operations, and AIP leverages the power of our existing machine learning technologies alongside generative AI models, including large language models (“LLMs”), directly within Gotham and/or Foundry to help operationalize AI on enterprise data.
Added
Apollo is our continuous delivery platform, enabling the orchestration of upgrades of services and assets every day to manage the underlying infrastructure that hosts our other platforms. Gotham integrates with our other platforms, as well as our broader defense offerings, to power a wide array of missions across allied defense and intelligence operations.
Removed
In the year ended December 31, 2023, our gross profit was $1.8 billion, reflecting a gross margin of 81%, or 82% when excluding stock-based compensation.
Added
The Ontology has continuously evolved over time, serving as the heart of our platforms by activating data and analytics inside operations, enabling real-time connectivity between data, analytics, and operational teams, as well as AI. Ontology generally refers to the systematic mapping of data to meaningful context.
Added
The Palantir Ontology goes far beyond the traditional concept by integrating the elements of a decision—the data, logic, and actions—into a foundational representation of the organization, and allowing users to build interconnected workflows, turning specialized expertise into shared infrastructure to dynamically optimize decision-making across the enterprise.
Added
The Ontology can help create a shared understanding across all users in a data ecosystem regardless of technical skills, enabling organizations to scale more efficiently and rapidly.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

90 edited+15 added−14 removed370 unchanged
Biggest changeAccordingly, our business, financial condition, results of operations, and growth prospects may be adversely affected by certain events or activities, including, but not limited to: • changes in fiscal or contracting policies or decreases in available government funding; • changes in government programs or applicable requirements; • restrictions in the grant of personnel security clearances to our employees; • ability to maintain facility clearances required to perform on classified contracts for U.S. federal government and foreign government agencies; 46 Table of Contents • ability to achieve or maintain one or more government certifications, including, but not limited to, our existing FedRAMP, IL2, IL4, IL5, and IL6 authorizations; • changes in the political environment, including before or after a change to the leadership within the government administration, or due to ongoing conflicts such as the Russia-Ukraine conflict and related economic sanctions or the conflict resulting from Hamas’ attack on Israel, and regional instability, and any resulting uncertainty or changes in policy or priorities and resultant funding; • changes in the government’s attitude towards the capabilities that we offer, especially in the areas of national defense, cybersecurity, and critical infrastructure, including the financial, energy, telecommunications, and healthcare sectors; • changes in the government’s attitude towards us as a company or our platforms as viable or acceptable software solutions; • appeals, disputes, or litigation relating to government procurement, including but not limited to bid protests by unsuccessful bidders on potential or actual awards of contracts to us or our partners by the government; • the adoption of new laws or regulations or changes to existing laws or regulations, including as may relate to the implementation of AI by federal agencies; • budgetary constraints, including automatic reductions as a result of “sequestration” or similar measures and constraints imposed by any lapses in appropriations for the federal government or certain of its departments and agencies, for example in connection with an extended federal government shutdown; • influence by, or competition from, third parties with respect to pending, new, or existing contracts with government customers; • changes in political or social attitudes with respect to security or data privacy issues; • potential delays or changes in the government appropriations or procurement processes, including as a result of events such as war, incidents of terrorism, natural disasters, and public health concerns or epidemics, such as the COVID-19 pandemic; and • increased or unexpected costs or unanticipated delays caused by other factors outside of our control, such as performance failures of our subcontractors.
Biggest changeAccordingly, our business, financial condition, results of operations, and growth prospects may be adversely affected by certain events or activities, including, but not limited to: • changes in fiscal or contracting policies or decreases in available government funding, including as a result of efforts by the federal government to analyze and enhance its operational efficiency or enforce executive orders and other administration priorities; • changes in government programs or applicable requirements; • restrictions in the grant of personnel security clearances to our employees; • ability to maintain facility clearances required to perform on classified contracts for U.S. federal government and foreign government agencies; • ability to achieve or maintain one or more government certifications, including, but not limited to, our existing FedRAMP, IL2, IL4, IL5, and IL6 authorizations; • changes in the political environment, including before or after a change to the leadership or overall composition within the government, or due to ongoing conflicts such as the Russia-Ukraine conflict and related economic sanctions, the 47 Table of Contents conflict resulting from Hamas’ attack on Israel and the ongoing conflict in the Middle East, and regional instability, and any resulting uncertainty or changes in policy or priorities and resultant funding; • changes in the government’s attitude towards the capabilities that we offer, especially in the areas of national defense, cybersecurity, and critical infrastructure, including the financial, energy, telecommunications, and healthcare sectors; • changes in the government’s attitude towards us as a company or our platforms as viable or acceptable software solutions; • appeals, disputes, or litigation relating to government procurement, including but not limited to bid protests by unsuccessful bidders on potential or actual awards of contracts to us or our partners by the government; • the adoption of new laws or regulations or changes to existing laws or regulations, including as may relate to the implementation of AI by federal agencies; • budgetary constraints, including automatic reductions as a result of “sequestration” or similar measures and constraints imposed by any lapses in appropriations for the federal government or certain of its departments and agencies, for example in connection with an extended federal government shutdown, including the federal government’s shutdown in the third quarter of 2025; • influence by, or competition from, third parties with respect to pending, new, or existing contracts with government customers; • changes in political or social attitudes with respect to security or data privacy issues; • potential delays or changes in the government appropriations or procurement processes, including as a result of events such as war, incidents of terrorism, natural disasters, and public health concerns or epidemics; and • increased or unexpected costs or unanticipated delays caused by other factors outside of our control, such as performance failures of our subcontractors.
Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: • our multi-class common stock structure, which provides our Founders and their affiliates with the ability to effectively control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of our outstanding common stock; • prior to the Final Class F Conversion Date (as defined in our amended and restated certificate of incorporation), the holders of our common stock will only be able to take action by written consent if the action also receives the affirmative consent of a majority of the outstanding shares of our Class F common stock, and after such point the holders of our common stock will only be able to take action at a meeting of the stockholders and will not be able to take action by written consent for any matter; • from and after the Final Class F Conversion Date, our Board of Directors will be classified into three classes of directors with staggered three-year terms; • our amended and restated certificate of incorporation does not provide for cumulative voting; • certain transactions, other than restructuring transactions or transactions that otherwise do not involve a Change of Control (as defined in our amended and restated certificate of incorporation), which transactions require, pursuant to Section 251(c) or Section 271(a) of the Delaware General Corporation Law, the approval of the holders of a majority of the voting power of all of the outstanding shares of our capital stock entitled to vote thereon, will require approval by the holders of at least 55.0% of the voting power of all of the outstanding shares of our capital stock entitled to vote thereon if the record date for determining the stockholders entitled to vote to approve such transaction occurs prior to the Final Class F Conversion Date; • certain transactions prior to the Final Class F Conversion Date, that would require disclosure pursuant to Item 404(a) of Regulation S-K, between any of our Founders (or their controlled affiliates), on the one hand, and us, on the other, in which consideration exchanges hands between our Founders (or their controlled affiliates) and us, and such consideration has a fair market value in excess of $50.0 million as determined in accordance with our amended and restated bylaws will require approval by either (i) the holders of at least 66 2/3% of the voting power of all of the outstanding shares of our capital stock, voting together as a single class, or (ii) an Independent Committee (as defined in our amended and restated bylaws); • the acquisition of our equity securities by our Founders (including their controlled affiliates), prior to the Final Class F Conversion Date, in a “Rule 13e-3 transaction” (as defined in Rule 13e-3 under the Exchange Act) will be conditioned on approval by (i) an Independent Committee and (ii) the holders of a majority of the voting power of our capital stock that is held by our stockholders other than the Founders (including their controlled affiliates) and any holder of the Class F Common Stock; • vacancies on our Board of Directors will be able to be filled only by our Board of Directors and not by stockholders; • our directors may only be removed as provided in the Delaware General Corporation Law; • a special meeting of our stockholders may only be called by the chairperson of our Board of Directors, our Chief Executive Officer, our President, or our Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directorships, whether or not there exist any vacancies or other unfilled seats in previously authorized directorships; • our amended and restated certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders, except that any designation and issuance of preferred stock must receive the affirmative vote of a majority of the outstanding shares of our Class F common stock; and • advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: • our multi-class common stock structure, which provides our Founders and their affiliates with the ability to effectively control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of our outstanding common stock; • prior to the Final Class F Conversion Date (as defined in our amended and restated certificate of incorporation), the holders of our common stock will only be able to take action by written consent if the action also receives the affirmative consent of a majority of the outstanding shares of our Class F common stock, and after such point the holders of our common stock will only be able to take action at a meeting of the stockholders and will not be able to take action by written consent for any matter; • from and after the Final Class F Conversion Date, our Board of Directors will be classified into three classes of directors with staggered three-year terms; • our amended and restated certificate of incorporation does not provide for cumulative voting; • certain transactions, other than restructuring transactions or transactions that otherwise do not involve a Change of Control (as defined in our amended and restated certificate of incorporation), which transactions require, pursuant to Section 251(c) or Section 271(a) of the Delaware General Corporation Law, the approval of the holders of a majority of the voting power of all of the outstanding shares of our capital stock entitled to vote thereon, will require approval by the holders of at least 55.0% of the voting power of all of the outstanding shares of our capital stock entitled to vote 53 Table of Contents thereon if the record date for determining the stockholders entitled to vote to approve such transaction occurs prior to the Final Class F Conversion Date; • certain transactions prior to the Final Class F Conversion Date, that would require disclosure pursuant to Item 404(a) of Regulation S-K, between any of our Founders (or their controlled affiliates), on the one hand, and us, on the other, in which consideration exchanges hands between our Founders (or their controlled affiliates) and us, and such consideration has a fair market value in excess of $50.0 million as determined in accordance with our amended and restated bylaws will require approval by either (i) the holders of at least 66 2/3% of the voting power of all of the outstanding shares of our capital stock, voting together as a single class, or (ii) an Independent Committee (as defined in our amended and restated bylaws); • the acquisition of our equity securities by our Founders (including their controlled affiliates), prior to the Final Class F Conversion Date, in a “Rule 13e-3 transaction” (as defined in Rule 13e-3 under the Exchange Act) will be conditioned on approval by (i) an Independent Committee and (ii) the holders of a majority of the voting power of our capital stock that is held by our stockholders other than the Founders (including their controlled affiliates) and any holder of the Class F Common Stock; • vacancies on our Board of Directors will be able to be filled only by our Board of Directors and not by stockholders; • our directors may only be removed as provided in the Delaware General Corporation Law; • a special meeting of our stockholders may only be called by the chairperson of our Board of Directors, our Chief Executive Officer, our President, or our Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directorships, whether or not there exist any vacancies or other unfilled seats in previously authorized directorships; • our amended and restated certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders, except that any designation and issuance of preferred stock must receive the affirmative vote of a majority of the outstanding shares of our Class F common stock; and • advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
Many countries are beginning to implement legislation and other guidance to align their international tax rules with the Organisation for Economic Co-operation and Development’s (“OECD”) Base Erosion and Profit Shifting recommendations and action plan that aim to standardize and modernize global corporate tax policy, including changes to cross-border tax, transfer pricing documentation rules, and nexus-based tax incentive practices.
Many countries are beginning to implement legislation and other guidance to align their international tax rules with the Organisation for Economic Co-operation and Development’s (“OECD”) Base Erosion and Profit Shifting (“BEPS”) recommendations and action plan that aim to standardize and modernize global corporate tax policy, including changes to cross-border tax, transfer pricing documentation rules, and nexus-based tax incentive practices.
For these reasons, we may not be able to utilize a material portion of our NOLs, which could potentially result in increased future tax liabilities to us and could adversely affect our results of operations. For additional information, see Note 11. Income Taxes in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
For these reasons, we may not be able to utilize a material portion of our NOLs, which could potentially result in increased future tax liabilities to us and could adversely affect our results of operations. For additional information, see Note 11. Taxes in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Our non-U.S. operations subject us to a variety of risks and challenges, including: • increased management, travel, infrastructure, and legal and financial compliance costs and time associated with having multiple non-U.S. operations, including but not limited to compliance with local employment laws and other applicable laws and regulations; 40 Table of Contents • longer payment cycles, greater difficulty in enforcing contracts, difficulties in collecting accounts receivable, especially in emerging markets, and the likelihood that revenue from non-U.S. system integrators, government contractors, and customers may need to be recognized when cash is received, at least until satisfactory payment history has been established, or upon confirmation of certain acceptance criteria or milestones; • the need to adapt our platforms for non-U.S. customers whether to accommodate customer preferences or local law; • changes to U.S. laws, regulations, or government enforcement practices which could impact the countries we operate in and, as a result, affect our ability to legally work in those countries or with their governments; • differing regulatory and legal requirements and possible enactment of additional regulations or restrictions on the use, import, or re-export of our platforms or the provision of services, which could delay, restrict, or prevent the sale or use of our platforms and services in some jurisdictions; • compliance with multiple and changing foreign laws and regulations, including those governing employment, privacy, data protection, information security, data transfer, AI, and the risks and costs of non-compliance with such laws and regulations; • new and different sources of competition not present in the United States; • heightened risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may cause us to withdraw from particular markets, or impact financial results and result in restatements of financial statements and irregularities in financial statements; • volatility in non-U.S. political and economic environments, including by way of examples, the potential effects of the ongoing Russia-Ukraine conflict, as well as economic sanctions the United States and other countries have imposed on Russia, and the conflict resulting from Hamas’ attack on Israel; • weaker protection of intellectual property rights in some countries and the risk of potential theft, copying, or other compromises of our technology, data, or intellectual property in connection with our non-U.S. operations, whether by state-sponsored malfeasance or other foreign entities or individuals; • volatility and fluctuations in currency exchange rates, including that, because many of our non-U.S. contracts are denominated in U.S. dollars, an increase in the strength of the U.S. dollar in the past has made our products more expensive for non-U.S. dollar denominated customers, which may make doing business with us less appealing to such customers; • management and employee communication and integration problems resulting from language differences, cultural differences, and geographic dispersion; • difficulties in repatriating or transferring funds from, or converting currencies in, certain countries; • potentially adverse tax consequences, including multiple and possibly overlapping tax regimes, the complexities of foreign value-added tax systems, and changes in tax laws; • lack of familiarity with local laws, customs, and practices, and laws and business practices favoring local competitors or partners; and • interruptions to our business operations and our customers’ business operations subject to events such as war, incidents of terrorism, natural disasters, public health concerns or epidemics (such as the COVID-19 pandemic), shortages or failures of power, internet, telecommunications, or hosting service providers, cyberattacks or malicious acts, or responses to these events.
Our non-U.S. operations subject us to a variety of risks and challenges, including: • increased management, travel, infrastructure, and legal and financial compliance costs and time associated with having multiple non-U.S. operations, including but not limited to compliance with local employment laws and other applicable laws and regulations; • longer payment cycles, greater difficulty in enforcing contracts, difficulties in collecting accounts receivable, especially in emerging markets, and the likelihood that revenue from non-U.S. system integrators, government contractors, and customers may need to be recognized when cash is received, at least until satisfactory payment history has been established, or upon confirmation of certain acceptance criteria or milestones; • the need to adapt our platforms for non-U.S. customers, whether to accommodate customer preferences or local law; • changes to U.S. laws, regulations, or government enforcement practices which could impact the countries we operate in and, as a result, affect our ability to legally work in those countries or with their governments; • differing regulatory and legal requirements and possible enactment of additional regulations or restrictions on the use, import, or re-export of our platforms or the provision of services, which could delay, restrict, or prevent the sale or use of our platforms and services in some jurisdictions; • compliance with multiple and new or changing foreign laws and regulations, including those governing employment, privacy, data protection, information security, data transfer, AI, and the risks and costs of non-compliance with such laws and regulations; • new and different sources of competition not present in the United States; 41 Table of Contents • heightened risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may cause us to withdraw from particular markets, or impact financial results and result in restatements of financial statements and irregularities in financial statements; • volatility in non-U.S. political and economic environments, including by way of examples, the potential effects of the ongoing Russia-Ukraine conflict, as well as economic sanctions the United States and other countries have imposed on Russia, the conflict resulting from Hamas’ attack on Israel, and the ongoing conflict in the Middle East; • weaker protection of intellectual property rights in some countries and the risk of potential theft, copying, or other compromises of our technology, data, or intellectual property in connection with our non-U.S. operations, whether by state-sponsored malfeasance or other foreign entities or individuals; • volatility and fluctuations in currency exchange rates, including that, because many of our non-U.S. contracts are denominated in U.S. dollars, an increase in the strength of the U.S. dollar in the past has made our products more expensive for non-U.S. dollar denominated customers, which may make doing business with us less appealing to such customers; • management and employee communication and integration problems resulting from language differences, cultural differences, and geographic dispersion; • difficulties in repatriating or transferring funds from, or converting currencies in, certain countries; • potentially adverse tax consequences, including multiple and possibly overlapping tax regimes, the complexities of foreign value-added tax systems, and changes in tax laws; • lack of familiarity with local laws, customs, and practices, and laws and business practices favoring local competitors or partners; and • interruptions to our business operations and our customers’ business operations subject to events such as war, incidents of terrorism, natural disasters, public health concerns or epidemics, shortages or failures of power, internet, telecommunications, or hosting service providers, cyberattacks or malicious acts, or responses to these events.
The CCPA went into effect on January 1, 2020, and the California Attorney General may bring enforcement actions, with penalties for violations of the CCPA. The CPRA went into effect on January 1, 2023 instilling enforcement authority in a new dedicated regulatory body, the California Privacy Protection Agency.
The CCPA went into effect on January 1, 2020, and the California Attorney General may bring enforcement actions, with penalties for violations of the CCPA. The CPRA went into effect on January 1, 2023 instilling enforcement authority in a new dedicated regulatory body, the California Privacy Protection Agency (“CPPA”).
Assuming that the Founders and certain of their affiliates collectively meet the Ownership Threshold (as defined below) on the applicable record date for a vote of the stockholders (except as provided in our amended and restated certificate of incorporation), shares of Class F common stock will generally have a number of votes per share in respect of a matter submitted to our stockholders that would cause the total votes of all shares of Class F common stock, together with the votes attributable to shares of Class A common stock and Class B common stock held by our Founders and their affiliates that are subject to the voting agreement among our Founders and Wilmington Trust, National Association (the “Founder Voting Agreement”) and the votes attributable to shares of Class A common stock and Class B common stock held by our Founders and their affiliates that are designated as Designated Founders’ Excluded Shares (as defined in our amended and restated certificate of incorporation), in each case entitled to vote on such matter, to equal, with respect to such matter, 49.999999% of the voting power of (i) all of the outstanding shares of capital stock of the Company entitled to vote on such matter (including in the case of the election of directors); or (ii) the shares present in person or represented by proxy and entitled to vote on such matter only if a majority of the shares present in person or represented by proxy and entitled to vote on 54 Table of Contents such matter is the applicable voting standard (as applicable, “49.999999% of the Voting Power”).
Assuming that the Founders and certain of their affiliates collectively meet the Ownership Threshold (as defined below) on the applicable record date for a vote of the stockholders (except as provided in our amended and restated certificate of incorporation), shares of Class F common stock will generally have a number of votes per share in respect of a matter submitted to our stockholders that would cause the total votes of all shares of Class F common stock, together with the votes attributable to shares of Class A common stock and Class B common stock held by our Founders and their affiliates that are subject to the voting agreement among our Founders and Wilmington Trust, National Association (the “Founder Voting Agreement”) and the votes attributable to shares of Class A common stock and Class B common stock held by our Founders and their affiliates that are designated as Designated Founders’ Excluded Shares (as defined in our amended and restated certificate of incorporation), in each case entitled to vote on such matter, to equal, with respect to such matter, 49.999999% of the voting power of (i) all of the outstanding shares of capital stock of the Company entitled to vote on such matter (including in the case of the election of directors); or (ii) the shares present in person or represented by proxy and entitled to vote on such matter only if a majority of the shares present in person or represented by proxy and entitled to vote on such matter is the applicable voting standard (as applicable, “49.999999% of the Voting Power”).
If any of these third-party services experience errors, disruptions, security issues, or other performance deficiencies, if they are updated such that our platforms become incompatible, if these services, software, or hardware fail or become unavailable due to extended outages, interruptions, defects, or otherwise, or if they are no longer available on commercially reasonable terms or prices (or at all), these issues could result in errors or defects in our platforms, cause our platforms to fail, our revenue and margins could decline, or our reputation and brand could be damaged, we could be exposed to legal or contractual liability, our expenses could increase, our ability to manage our operations could be interrupted, and our processes for managing our sales and servicing our 33 Table of Contents customers could be impaired until equivalent services or technology, if available, are identified, procured, and implemented, all of which may take significant time and resources, increase our costs, and could adversely affect our business.
If any of these third-party services experience errors, disruptions, security issues, or other performance deficiencies, if they are updated such that our platforms become incompatible, if these services, software, or hardware fail or become unavailable due to extended outages, interruptions, defects, or otherwise, or if they are no longer available on commercially reasonable terms or prices (or at all), these issues could result in errors or defects in our platforms, cause our platforms to fail, our revenue and margins could decline, or our reputation and brand could be damaged, we could be exposed to legal or contractual liability, our expenses could increase, our ability to manage our operations could be interrupted, and our processes for managing our sales and servicing our customers could be impaired until equivalent services or technology, if available, are identified, procured, and implemented, all of which may take significant time and resources, increase our costs, and could adversely affect our business.
Although we believe these exclusive forum provisions benefit us by providing increased consistency in the application of Delaware law and federal securities laws in the types of lawsuits to which each applies, the exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or any of our directors, officers, stockholders, or other 51 Table of Contents employees, which may discourage lawsuits with respect to such claims against us and our current and former directors, officers, stockholders, or other employees.
Although we believe these exclusive forum provisions benefit us by providing increased consistency in the application of Delaware law and federal securities laws in the types of lawsuits to which each applies, the exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or any of our directors, officers, stockholders, or other employees, which may discourage lawsuits with respect to such claims against us and our current and former directors, officers, 52 Table of Contents stockholders, or other employees.
Any change in or repeal of FASA, or a contrary interpretation of FASA by a court of competent jurisdiction, would adversely affect our competitive position for U.S. federal government contracts. 49 Table of Contents A decline in the U.S. and other government budgets, changes in spending or budgetary priorities, or delays in contract awards have affected and may continue to significantly and adversely affect our future revenue and limit our growth prospects.
Any change in or repeal of FASA, or a contrary interpretation of FASA by a court of competent jurisdiction, would adversely affect our competitive position for U.S. federal government contracts. 50 Table of Contents A decline in the U.S. and other government budgets, changes in spending or budgetary priorities, or delays in contract awards have affected and may continue to significantly and adversely affect our future revenue and limit our growth prospects.
Such events or activities, among others, have caused and could continue to cause governments and governmental agencies to delay or refrain from purchasing our platforms and services in the future, reduce the size or payment amounts of purchases from existing or new government customers, or otherwise have an adverse effect on our business, results of operations, financial condition, and growth prospects.
Such events or activities, among others, have caused and could continue to cause governments and governmental agencies to delay or refrain from purchasing or paying for our platforms and services in the future, reduce the size or payment amounts of purchases from existing or new government customers, or otherwise have an adverse effect on our business, results of operations, financial condition, and growth prospects.
Our systems and the third-party systems upon which we and our customers rely are also vulnerable to damage or interruption from catastrophic occurrences such as earthquakes, floods, fires, power loss, telecommunication failures, cybersecurity threats, terrorist attacks, such as the conflict resulting from Hamas’ attack on Israel, natural disasters, public health crises (such as the COVID-19 pandemic), geopolitical tensions such as those that may be caused by the ongoing Russia-Ukraine conflict, or acts of misconduct.
Our systems and the third-party systems upon which we and our customers rely are also vulnerable to damage or interruption from catastrophic occurrences such as earthquakes, floods, fires, power loss, telecommunication failures, cybersecurity threats, terrorist attacks, such as the conflict resulting from Hamas’ attack on Israel, natural disasters, public health crises, geopolitical tensions such as those that may be caused by the ongoing Russia-Ukraine conflict, or acts of misconduct.
The loss of, or inability to obtain, certain third-party licenses or other rights or to obtain such licenses or rights on favorable terms, or the need to engage in litigation regarding these matters, could result in product roll-backs, delays in product releases until equivalent technology can be identified, licensed or developed, if at all, and integrated into our platforms, and may have a material adverse effect on our business, financial condition, and results of 37 Table of Contents operations.
The loss of, or inability to obtain, certain third-party licenses or other rights or to obtain such licenses or rights on favorable terms, or the need to engage in litigation regarding these matters, could result in product roll-backs, delays in product releases until equivalent technology can be identified, licensed or developed, if at all, and integrated into our platforms, and may have a material adverse effect on our business, financial condition, and results of operations.
The overarching complexity of laws and regulations relating to privacy, data protection, and information security around the world pose a compliance challenge that could manifest in costs, damages, or liability in other forms as a result of failure to implement proper programmatic controls, failure to adhere to those controls or to the commitments we make, or the malicious 39 Table of Contents or inadvertent breach of applicable legal, regulatory, or contractual privacy, data protection, or information security requirements by us, our employees, our business partners, or our customers.
The overarching complexity of laws and regulations relating to privacy, data protection, and information security around the world pose a compliance challenge that could manifest in costs, damages, or liability in other forms as a result of failure to implement proper programmatic controls, failure to adhere to those controls or to the commitments we make, or the malicious or inadvertent breach of applicable legal, regulatory, or contractual privacy, data protection, or information security requirements by us, our employees, our business partners, or our customers.
Bribery Act, and other laws may result in whistleblower complaints, adverse media coverage, investigations, imposition of significant legal fees, loss of export privileges, as well as severe criminal or civil sanctions, including suspension or debarment from U.S. government contracting, and we may be subject to other liabilities and adverse effects on our 43 Table of Contents reputation, which could negatively affect our business, results of operations, financial condition, and growth prospects.
Bribery Act, and other laws may result in whistleblower complaints, adverse media coverage, investigations, imposition of significant legal fees, loss of export privileges, as well as severe criminal or civil sanctions, including suspension or debarment from U.S. government contracting, and we may be subject to other liabilities and adverse effects on our reputation, which could negatively affect our business, results of operations, financial condition, and growth prospects.
Furthermore, because the interpretation and application of laws, standards, contractual obligations and other obligations relating to privacy, data protection, and information security are uncertain, these laws, standards, and contractual and other obligations may be interpreted and applied in a manner that is, or is alleged to be, inconsistent with our data management practices, our policies or procedures, or the features of our platforms, or we may simply fail to properly develop or implement our practices, policies, procedures, or features in compliance with such obligations.
Furthermore, because the interpretation and application of laws, standards, contractual obligations and other obligations relating to privacy, data protection, and information security are uncertain, these laws, standards, and contractual and other obligations may be interpreted and applied in a manner that is, or is alleged to be, inconsistent with our data 40 Table of Contents management practices, our policies or procedures, or the features of our platforms, or we may simply fail to properly develop or implement our practices, policies, procedures, or features in compliance with such obligations.
These laws and regulations may impose other added costs on our business, and failure to 48 Table of Contents comply with these or other applicable regulations and requirements, including non-compliance in the past, could lead to claims for damages from our channel partners, penalties, and termination of contracts and suspension or debarment from government contracting for a period of time with government agencies.
These laws and regulations may impose other added costs on our business, and failure to comply with these or other applicable regulations and requirements, including non-compliance in the past, could lead to claims for damages from our channel partners, penalties, and termination of contracts and suspension or debarment from government contracting for a period of time with government agencies.
As of December 31, 2024, approximately 2.7 million options will expire through December 2025 if not exercised prior to their respective expiration dates, and we expect many holders will elect to exercise such options prior to expiration. Upon exercise, the holders will receive shares of our Class A or Class B common stock, which may subsequently be sold.
As of December 31, 2025, approximately 2.2 million options will expire through December 2026 if not exercised prior to their respective expiration dates, and we expect many holders will elect to exercise such options prior to expiration. Upon exercise, the holders will receive shares of our Class A or Class B common stock, which may subsequently be sold.
In the event that our Founders and their affiliates or other stockholders acquire more than 50% of the voting power of the Company, we may in the future be able to rely on the “controlled company” exemptions under the Nasdaq corporate governance rules due to this concentration of voting power and the ability of our Founders and their affiliates to act as a group.
In the event that our Founders and their affiliates or other stockholders acquire more than 50% of the voting power of the Company, we may in the future be able to rely on the “controlled company” exemptions under the Nasdaq corporate governance rules due to this concentration of voting power and the ability of our Founders and their affiliates 54 Table of Contents to act as a group.
Thiel as Designated Founders’ Excluded Shares represented less than 5% of the voting power of our outstanding capital stock as of February 10, 2025. In the future, Mr. Thiel or our other Founders could designate additional shares as Designated Founders’ Excluded Shares.
Thiel as Designated Founders’ Excluded Shares represented less than 5% of the voting power of our outstanding capital stock as of February 10, 2026. In the future, Mr. Thiel or our other Founders could designate additional shares as Designated Founders’ Excluded Shares.
Any such damages, penalties, disruption, or limitation in our ability to do business with a government could adversely impact, and could have a material adverse effect on, our business, results of operations, financial condition, public perception, and growth prospects. Evolving government procurement policies and increased emphasis on cost over performance could adversely affect our business.
Any such damages, penalties, disruption, or limitation in our ability 49 Table of Contents to do business with a government could adversely impact, and could have a material adverse effect on, our business, results of operations, financial condition, public perception, and growth prospects. Evolving government procurement policies and increased emphasis on cost over performance could adversely affect our business.
As a result, when problems occur for a customer using our platforms, it may be difficult to identify the sources of these problems, and we may receive blame for a security, access control, or other compliance breach that was the result of the failure of one of the other elements in a customer’s or another vendor’s IT, security, or compliance infrastructure.
As a result, when problems occur for a customer 37 Table of Contents using our platforms, it may be difficult to identify the sources of these problems, and we may receive blame for a security, access control, or other compliance breach that was the result of the failure of one of the other elements in a customer’s or another vendor’s IT, security, or compliance infrastructure.
Our Founders have agreed through the Founder Voting Trust Agreement and Founder Voting Agreement that all of the shares of Class F common stock and all of the shares of our capital stock over which they and their affiliates have granted a proxy under the Founder Voting Agreement will be voted in the manner instructed by a majority of our Founders who are then party to the Founder Voting Agreement.
Our Founders have agreed 55 Table of Contents through the Founder Voting Trust Agreement and Founder Voting Agreement that all of the shares of Class F common stock and all of the shares of our capital stock over which they and their affiliates have granted a proxy under the Founder Voting Agreement will be voted in the manner instructed by a majority of our Founders who are then party to the Founder Voting Agreement.
In this case, although the shares of our Class F common stock would generally be 55 Table of Contents entitled to zero votes per share on that matter, all of the shares that are then subject to the Founder Voting Agreement would continue to be voted in accordance with the decision of a majority in number of the Founders who are then party to the Founder Voting Agreement.
In this case, although the shares of our Class F common stock would generally be entitled to zero votes per share on that matter, all of the shares that are then subject to the Founder Voting Agreement would continue to be voted in accordance with the decision of a majority in number of the Founders who are then party to the Founder Voting Agreement.
To the extent we are not able to obtain or maintain a facility security clearance, we may not be able to bid on or win new classified contracts, and existing contracts requiring a facility security clearance could be terminated, either of which would have an adverse impact on our business, financial condition, and results of operations.
To the extent we are not able to obtain or maintain a facility security clearance, we may not be able to bid on or win new classified contracts, and existing contracts 48 Table of Contents requiring a facility security clearance could be terminated, either of which would have an adverse impact on our business, financial condition, and results of operations.
Excluding the voting power of the Class F common stock, our Founders and their affiliates owned shares entitled to approximately 22% of the voting power of our outstanding capital stock in the aggregate as of February 10, 2025.
Excluding the voting power of the Class F common stock, our Founders and their affiliates owned shares entitled to approximately 22% of the voting power of our outstanding capital stock in the aggregate as of February 10, 2026.
For example, following Russia’s invasion of Ukraine, and as the conflict has continued, the United States and other countries have imposed economic sanctions and severe export control restrictions against Russia, Belarus, and certain regions of Ukraine, and the United States and other countries could continue to impose wider sanctions and export restrictions and take other actions 44 Table of Contents should the conflict further escalate.
For example, following Russia’s invasion of Ukraine, and as the conflict has continued, the United States and other countries have imposed economic sanctions and severe export control restrictions against Russia, Belarus, and certain regions of Ukraine, and the United States and other countries could continue to impose wider sanctions and export restrictions and take other actions should the conflict further escalate.
Depending on certain circumstances, including the extent to which other holders of Class B common stock convert or sell such shares of Class B common stock, such Designated Founders’ Excluded Shares may have significant voting power and increase Mr. Thiel or his affiliates’ relative voting power compared to the other Founders. The shares identified by Mr.
Depending on certain circumstances, including the extent to which other holders of Class B common stock convert or sell such shares of Class B common stock, such Designated Founders’ Excluded Shares may 57 Table of Contents have significant voting power and increase Mr. Thiel or his affiliates’ relative voting power compared to the other Founders. The shares identified by Mr.
Any future issuances of additional shares of Class A common stock will not be subject to approval by our stockholders except as required by the Nasdaq listing standards. General Risk Factors Adverse economic conditions or reduced technology spending may adversely impact our business.
Any future issuances of additional shares of Class A common stock will not be subject to approval by our stockholders except as required by the Nasdaq listing standards. 59 Table of Contents General Risk Factors Adverse economic conditions or reduced technology spending may adversely impact our business.
Our business operations have been, and could in the future be, subject to interruption by natural disasters, earthquakes, flooding, fire, power shortages, pandemics (such as COVID-19), terrorism, such as Hamas’ attack against Israel in 2023 and the ensuing conflict, political unrest, cyberattacks including as may be exacerbated by the ongoing Russia-Ukraine conflict, geopolitical tensions including those related to the invasion of Ukraine, the effects of climate change such as drought, wildfires, increased storm severity, and sea level rise, telecommunications failure, vandalism, and other events beyond our control.
Our business operations have been, and could in the future be, subject to interruption by natural disasters, earthquakes, flooding, fire, power shortages, pandemics, terrorism, such as Hamas’ attack against Israel in 2023 and the ensuing conflict, political unrest, cyberattacks including as may be exacerbated by the ongoing Russia-Ukraine and Middle East conflicts, geopolitical tensions including those related to the invasion of Ukraine, the effects of climate change such as drought, wildfires, increased storm severity, and sea level rise, telecommunications failure, vandalism, and other events beyond our control.
If our employees are unable to obtain security clearances in a timely manner, or at all, or if our employees who hold security clearances are unable to maintain their clearances 47 Table of Contents or terminate employment with us, then we may be unable to comply with relevant U.S. and international government agency requirements, or our customers requiring classified work could choose to terminate or decide not to renew one or more contracts requiring employees to obtain or maintain security clearances upon expiration.
If our employees are unable to obtain security clearances in a timely manner, or at all, or if our employees who hold security clearances are unable to maintain their clearances or terminate employment with us, then we may be unable to comply with relevant U.S. and international government agency requirements, or our customers requiring classified work could choose to terminate or decide not to renew one or more contracts requiring employees to obtain or maintain security clearances upon expiration.
Moreover, to the extent that we do not effectively address capacity constraints, upgrade our systems as needed, and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business, financial condition, and results of operations could be adversely affected.
Moreover, to the extent that we do not effectively address capacity constraints, upgrade our systems as needed, and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business, 34 Table of Contents financial condition, and results of operations could be adversely affected.
Additionally, while some employees have returned to our offices, it could be particularly difficult to mitigate the impact of these events on our employees continuing to work remotely.
Additionally, while many of our employees have returned to our offices, it could be particularly difficult to mitigate the impact of these events on our employees continuing to work remotely.
We may be required to spend significant resources to monitor and protect our intellectual property and other proprietary rights, and we may conclude that in at least some instances the benefits of 35 Table of Contents protecting our intellectual property or other proprietary rights may be outweighed by the expense or distraction to our management.
We may be required to spend significant resources to monitor and protect our intellectual property and other proprietary rights, and we may conclude that in at least some instances the benefits of protecting our intellectual property or other proprietary rights may be outweighed by the expense or distraction to our management.
In addition, if the open source software we use is no longer maintained by the relevant open source community, then it may be more difficult to make the necessary revisions to our software, including modifications to address security vulnerabilities, which could impact our ability to mitigate cybersecurity risks or fulfill our contractual obligations to our customers.
In addition, if the open source software we use is no longer maintained by the relevant open source community, then it may be more difficult 38 Table of Contents to make the necessary revisions to our software, including modifications to address security vulnerabilities, which could impact our ability to mitigate cybersecurity risks or fulfill our contractual obligations to our customers.
A number of proposals are pending before U.S. federal, state, and foreign legislative and regulatory bodies that could significantly affect our business. For example, despite recent developments including the EU’s adoption of an adequacy decision for the EU-U.S.
A number of proposals are pending before U.S. federal, state, and foreign legislative and regulatory bodies that could significantly affect our business. For example, despite the EU’s adoption of an adequacy decision for the EU-U.S.
For example, S&P did not allow most newly public companies utilizing dual- or multi-class capital structures to be included in their indices from 2017 until a change in their eligibility requirements for such companies in 2023. Following this change, we joined 58 Table of Contents the S&P 500 index in September 2024.
For example, S&P did not allow most newly public companies utilizing dual- or multi-class capital structures to be included in their indices from 2017 until a change in their eligibility requirements for such companies in 2023. Following this change, we joined the S&P 500 index in September 2024.
Despite our internal systems and processes, errors, failures, or bugs may not be found 36 Table of Contents or may not be properly mitigated or remediated in configured, reconfigured, upgraded or new software or other releases until after commencement of commercial shipments.
Despite our internal systems and processes, errors, failures, or bugs may not be found or may not be properly mitigated or remediated in configured, reconfigured, upgraded or new software or other releases until after commencement of commercial shipments.
In addition, although we have implemented policies and procedures designed to 41 Table of Contents ensure compliance with these laws and policies, there can be no assurance that all of our employees, contractors, partners, and agents will comply with these laws and policies.
In addition, although we have implemented policies and procedures designed to ensure compliance with these laws and policies, there can be no assurance that all of our employees, contractors, partners, and agents will comply with these laws and policies.
We expect our non-U.S. operations 59 Table of Contents to continue to grow in the near term and we are continually monitoring our foreign currency exposure to determine if we should consider a hedging program. Today, our non-U.S. contracts are denominated in either U.S. dollars or local currency, while our non-U.S. operating expenses are often denominated in local currencies.
We expect our non-U.S. operations to continue to grow in the near term and we are continually monitoring our foreign currency exposure to determine if we should consider a hedging program. Today, our non-U.S. contracts are denominated in either U.S. dollars or local currency, while our non-U.S. operating expenses are often denominated in local currencies.
Conversely, to the extent that we do provide such assistance, or do not challenge those requests publicly in court, we may experience adverse political, business, and reputational consequences from other customers or portions of the public arising from concerns over privacy or the government’s activities.
Conversely, to the extent that we do provide such assistance in accordance with applicable law, or do not challenge those requests publicly in court, we may experience adverse political, business, and reputational consequences from other customers or portions of the public arising from concerns over privacy or the government’s activities.
Many of these laws and regulations are subject to change and 38 Table of Contents uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or otherwise harm our business.
Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or otherwise harm our business.
Even if our patent applications do issue as patents, they may not issue in a form that is sufficiently broad to protect our technology, prevent competitors or other third parties from competing with us or otherwise provide us with any competitive advantage.
Even if our patent 35 Table of Contents applications do issue as patents, they may not issue in a form that is sufficiently broad to protect our technology, prevent competitors or other third parties from competing with us or otherwise provide us with any competitive advantage.
Moreover, we are subject to the examination of our income tax returns by tax authorities in the United States and various foreign jurisdictions, which may disagree with our calculation of research and development tax credits, cross-jurisdictional transfer pricing, or other matters and assess additional taxes, interest or penalties.
Moreover, we are subject to the examination of our income tax returns by tax authorities in the United States and various foreign jurisdictions, which have disagreed, and may in the future disagree, with our calculation of research and development tax credits, cross-jurisdictional transfer pricing, or other matters and have assessed, and may continue to assess, additional taxes, interest or penalties.
Natural disasters, including climate change, and other catastrophic events beyond our control could harm our business. Natural disasters, including climate change, or other catastrophic events may cause damage or disruption to our operations, non-U.S. commerce and the global economy, and thus could have a negative effect on us.
Natural disasters, including climate change, or other catastrophic events may cause damage or disruption to our operations, non-U.S. commerce and the global economy, and thus could have a negative effect on us.
A number of provisions relating to the multiple class structure of our common stock are novel or otherwise not common among other corporations with multiple class structures.
The multiple class structure of our common stock features certain provisions that are novel or otherwise not common among other corporations with multiple class structures. A number of provisions relating to the multiple class structure of our common stock are novel or otherwise not common among other corporations with multiple class structures.
Non-compliance with the GDPR specifically may result in administrative fines or monetary penalties of up to 4% of worldwide annual revenue in the preceding financial year or €20 million (whichever is higher) for the most serious infringements, and could result in proceedings against us by governmental entities or other related parties and may otherwise adversely impact our business, financial condition, and results of operations.
Non-compliance with the GDPR specifically may result in administrative fines or monetary penalties of up to 4% of worldwide annual revenue in the preceding financial year or €20 million (whichever is higher) for the most serious infringements and non-compliance with the EU AIA may result in penalties up to €35 million or 7% of worldwide annual turnover (whichever is higher), each of which could result in proceedings against us by governmental entities or other related parties and may otherwise adversely impact our business, financial condition, and results of operations.
Further, certain administrations, including in the United States, have encouraged companies to sign on to voluntary commitments to manage the risks posed by AI alongside related legislative or regulatory efforts, some of which we have signed.
Further, certain administrations have encouraged companies to sign on to voluntary commitments to manage the risks posed by AI alongside related legislative or regulatory efforts, some of which we have signed.
Future changes in our stock ownership, some of which are outside of our control, could result in an ownership change under Section 382 of the Code.
Future changes in 46 Table of Contents our stock ownership, some of which are outside of our control, could result in an ownership change under Section 382 of the Code.
Factors that could cause fluctuations in the public trading price of our Class A common stock include the following: • the number of shares of our Class A common stock publicly owned and available for trading; • price and volume fluctuations in the overall stock market from time to time; • volatility in the trading prices and trading volumes of technology stocks; • the inclusion, exclusion, or deletion of our Class A common stock from any major trading indices, such as the Standard & Poor’s (“S&P”) 500 Index or the Nasdaq-100 Index; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • sales or expected sales of shares of our Class A common stock by us or our stockholders; • our repurchase of shares of our Class A common stock pursuant to our Share Repurchase Program; • short-selling of our Class A common stock or related derivative securities; • failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company or our failure to meet these estimates or the expectations of investors; • any financial projections we may provide to the public, any changes in those projections or our failure to meet those projections; • announcements by us or our competitors of new platforms, products, services, or capabilities; • the public’s reaction to our press releases, other public announcements, and filings with the SEC; • rumors and market speculation involving us or other companies in our industry; • actual or anticipated changes in our results of operations or fluctuations in our results of operations; 50 Table of Contents • actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally; • litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • actual or perceived privacy or security breaches or other incidents; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses, services or technologies by us or our competitors; • changes in our management, including any departures of one of our Founders; • new laws or regulations, public expectations regarding new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • changes in accounting standards, policies, guidelines, interpretations, or principles; • any significant change in our management; • other events or factors, including those resulting from war, including the ongoing Russia-Ukraine conflict, incidents of terrorism, such as Hamas’ attack against Israel, pandemics, or responses to these events; and • general macroeconomic conditions, such as heightened interest rates and slow or negative growth of our markets.
Factors that could cause fluctuations in the public trading price of our Class A common stock include the following: • the number of shares of our Class A common stock publicly owned and available for trading; • price and volume fluctuations in the overall stock market from time to time; • volatility in the trading prices and trading volumes of technology stocks; • the inclusion, exclusion, or deletion of our Class A common stock from any major trading indices, such as the Standard & Poor’s (“S&P”) 500 Index or the Nasdaq-100 Index; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • sales or expected sales of shares of our Class A common stock by us or our stockholders; • short-selling of our Class A common stock or related derivative securities; • failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company or our failure to meet these estimates or the expectations of investors; • any financial projections we may provide to the public, any changes in those projections or our failure to meet those projections; • announcements by us or our competitors of new platforms, products, services, or capabilities; • the public’s reaction to our press releases, other public announcements, and filings with the SEC; • rumors and market speculation involving us or other companies in our industry; • actual or anticipated changes in our results of operations or fluctuations in our results of operations; • actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally; 51 Table of Contents • litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • actual or perceived privacy or security breaches or other incidents; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses, services or technologies by us or our competitors; • changes in our management, including any departures of one of our Founders; • new laws, regulations, or government policies, as well as public expectations about or new interpretations or enforcement of the aforementioned, as applicable to our business; • changes in accounting standards, policies, guidelines, interpretations, or principles; • any significant change in our management; • other events or factors, including those resulting from war, including the ongoing Russia-Ukraine and Middle East conflicts, incidents of terrorism, such as Hamas’ attack against Israel, pandemics, or responses to these events; and • general macroeconomic conditions, such as fluctuating interest rates, the potential or actual imposition of tariffs or other impacts on trade relations, and slow or negative growth of our markets.
Downturns in macroeconomic conditions, including heightened interest rates; supply chain disruptions; global political and economic uncertainty; geopolitical tensions, such as the ongoing Russia-Ukraine conflict and the conflict resulting from Hamas’ attack on Israel; a lack of availability of credit; a reduction in business confidence and activity; the curtailment of government or corporate spending; public health concerns or emergencies; financial market volatility; and other factors have in the past, and may in the future, negatively affect the industries to which we sell our platforms and services.
Downturns in macroeconomic conditions, including fluctuating interest rates; supply chain disruptions; global political and economic uncertainty; geopolitical tensions, such as the ongoing Russia-Ukraine conflict, and the conflict resulting from Hamas’ attack on Israel and ongoing conflict in the Middle East; a lack of availability of credit; a reduction in business confidence and activity; the curtailment of government or corporate spending; public health concerns or emergencies; financial market volatility; the potential or actual imposition of tariffs or other impacts on trade relations; and other factors have in the past, and may in the future, negatively affect the industries to which we sell our platforms and services.
U.S. government spending levels for defense-related and other programs are uncertain, and may not be sustained at the levels associated with government fiscal year 2024. In addition, the current administration has stated its intent to evaluate overall government spending, which could impact our business, results of operations, financial condition, and growth prospects.
U.S. government spending levels for defense-related and other programs are uncertain, and may not be sustained at the levels associated with government fiscal year 2025. In addition, the current administration has launched efforts to evaluate and reduce overall government spending, which could impact our business, results of operations, financial condition, and growth prospects.
We may initiate claims or litigation against third parties for infringement, misappropriation, or other violation of our intellectual property or other proprietary rights or to establish the validity of our intellectual property or other proprietary rights.
We have initiated, and may in the future initiate, claims or litigation against third parties for infringement, misappropriation, or other violation of our intellectual property or other proprietary rights or to establish the validity of our intellectual property or other proprietary rights.
Our successes to date have primarily come from customers in relatively stable and developed countries, but we are in the process of entering new and emerging markets in non-U.S. countries, including with law enforcement, national security, and other government agencies, as part of our growth strategy.
Our successes to date have primarily come from customers in relatively stable and developed countries, but we have entered, and may continue to enter, new and emerging markets in non-U.S. countries, including with customers in law enforcement, national security, and other government agencies, as part of our growth strategy.
In certain contexts, the services we provide might be classified as defense services subject to the ITAR separately from the products we provide.
In certain contexts, the services we 44 Table of Contents provide might be classified as defense services subject to the ITAR separately from the products we provide.
Changes in accounting principles or their application to us could result in unfavorable accounting charges or effects, which could adversely affect our results of operations and growth prospects. We prepare our consolidated financial statements in accordance with GAAP.
Changes in accounting principles or their application to us could result in unfavorable accounting charges or effects, which could adversely affect our results of operations and growth prospects. We prepare our consolidated financial statements in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States.
In light of our 34 Table of Contents confidentiality and privacy commitments, we may legally challenge law enforcement or other government requests to provide information, to obtain encryption keys, or to modify or weaken encryption.
In light of our confidentiality, privacy, and customer digital sovereignty commitments, we may legally challenge law enforcement or other government requests to provide information, to obtain encryption keys, or to modify or weaken encryption.
In addition, the trustee will vote shares of Class F common stock in accordance with the 56 Table of Contents decision of a majority in number of the Founders who are then party to the Founder Voting Agreement, regardless of such Founders’ relative ownership of any class of our common stock.
In addition, the trustee will vote shares of Class F common stock in accordance with the decision of a majority in number of the Founders who are then party to the Founder Voting Agreement, regardless of such Founders’ relative ownership of any class of our common stock. In August 2020, we granted two of our Founders, Mr.
Additionally, post-Brexit updates to United Kingdom (“U.K.”) data protection laws and regulations, while largely conforming to EU GDPR standards paving the way for a 2021 European Commission adequacy determination for export of personal data from the European Economic Area to the U.K., may change over time as the U.K. and its regulator, the Information Commissioner’s Office, continue to examine its global market standing, and a formal sunset clause will necessitate a reassessment and renegotiated terms to carry the determination beyond June 2025.
Additionally, post-Brexit updates to United Kingdom (“U.K.”) data protection laws and regulations, such as the Data (Use and Access) Act 2025, while largely conforming to EU GDPR standards paving the way for a 2021 European Commission adequacy determination for export of personal data from the European Economic Area to the U.K., may change over time as the U.K. and its regulator, the Information Commissioner’s Office, continue to examine its global market standing.
As of December 31, 2024, there were 2,242,389,510 shares of our Class A common stock outstanding, 95,400,680 shares of our Class B common stock outstanding and 1,005,000 shares of our Class F common stock outstanding. Substantially all of these shares may be immediately sold, although sales by our affiliates remain subject to compliance with the volume limitations of Rule 144.
As of December 31, 2025, there were 2,290,986,536 shares of our Class A common stock outstanding, 99,200,290 shares of our Class B common stock outstanding and 1,005,000 shares of our Class F common stock outstanding. Substantially all of these shares may be immediately sold, although sales by our affiliates remain subject to compliance with the volume limitations of Rule 144.
While the number of outstanding Corporation Equity Securities may exceed the number of shares of our outstanding capital stock, as a comparison, there were 2,338,795,190 shares of our common stock outstanding as of December 31, 2024.
While the number of outstanding Corporation Equity Securities may exceed the number of shares of our outstanding capital stock, as a comparison, there were 2,391,191,826 shares of our common stock outstanding as of December 31, 2025.
For instance, if one Founder has withdrawn from the Founder Voting Agreement and such withdrawing Founder votes his shares in the same manner as the shares of Class F common stock are voted pursuant to the Founder Voting Trust Agreement, then our Founders and their affiliates, in the aggregate, could exercise 49.999999% of the Voting Power of our capital stock plus the voting power of shares held by the withdrawing Founder (which would no longer represent a subset of the 49.999999% of the Voting Power of our capital stock voted by those Founders that remain party to the Founder Voting Agreement).
For instance, if one Founder has withdrawn from the Founder Voting Agreement and such withdrawing Founder votes his shares in the same manner as the shares of Class F common stock are voted pursuant to the Founder Voting Trust Agreement, then our Founders and their affiliates, in the aggregate, could exercise 49.999999% of the Voting Power of our capital stock plus the voting power of shares held by the withdrawing Founder (which would no longer represent a subset of the 49.999999% of the Voting Power of our capital stock voted by those Founders that remain party to the Founder Voting Agreement). 56 Table of Contents As a result of future issuances of our common stock or the disposal of shares of our common stock by our Founders and their affiliates, our Founders and their affiliates could have voting power that is substantially greater than, and outsized in comparison to, their economic interests and the percentage of our common stock that they hold.
We are required to annually comply with the SEC rules that implement Section 404 of the Sarbanes-Oxley Act and are therefore required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose.
We are required to annually comply with the SEC rules that implement Section 404 of the Sarbanes-Oxley Act and are therefore required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. 61 Table of Contents Our independent registered public accounting firm must also formally attest to the effectiveness of our internal control over financial reporting annually.
Any determination to pay dividends in the future will be at the discretion of our Board of Directors. Consequently, stockholders must rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.
Consequently, stockholders must rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.
In order to maintain and improve the effectiveness of our financial statement and disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight. 60 Table of Contents Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business.
In order to maintain and improve the effectiveness of our financial statement and disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight.
As a result, any Founders who are then party to the Founder Voting Agreement or certain of their affiliates could hold a nominal equity interest with little to no voting rights but meet the Ownership Threshold and therefore have voting power that provides effective control of our company. 57 Table of Contents The multiple class structure of our common stock features certain provisions that are novel or otherwise not common among other corporations with multiple class structures.
As a result, any Founders who are then party to the Founder Voting Agreement or certain of their affiliates could hold a nominal equity interest with little to no voting rights but meet the Ownership Threshold and therefore have voting power that provides effective control of our company.
The multi-class structure of our common stock, the Founder Voting Trust Agreement and the Founder Voting Agreement by which our Founders exercise effective control over all matters submitted to a vote of our stockholders will exist for the foreseeable future.
Such a challenge may cause delays in the certification of any vote of our stockholders or in the effectiveness of any action of our stockholders. 58 Table of Contents The multi-class structure of our common stock, the Founder Voting Trust Agreement and the Founder Voting Agreement by which our Founders exercise effective control over all matters submitted to a vote of our stockholders will exist for the foreseeable future.
Complying with the GDPR or other data protection laws, directives, and regulations as they emerge may cause us to incur substantial operational costs or require us to modify our data handling practices on an ongoing basis.
Complying with the GDPR, EU AIA, NIS2, DORA, the Data Act, or other EU laws, directives, and regulations as they emerge may cause us to incur substantial operational costs, lead to challenges for our customers’ implementation and use of our platform, or require us to modify our data handling practices on an ongoing basis.
Any substantial changes in domestic or international corporate tax policies, regulations or guidance, enforcement activities or legislative initiatives may materially adversely affect our business, the amount of taxes we are required to pay and our financial condition and results of operations generally. 45 Table of Contents We may not be able to utilize a significant portion of our net operating loss carryforwards and tax credits, which could adversely affect our results of operations.
Any substantial changes in domestic or international corporate tax policies, regulations or guidance, enforcement activities or legislative initiatives may materially adversely affect our business, the amount of taxes we are required to pay and our financial condition and results of operations generally.
These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and to cause us to take other corporate actions they desire, any of which, under certain circumstances, could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock, and could also affect the price that some investors are willing to pay for our Class A common stock. 53 Table of Contents If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about us, our business or our market, or if they change their recommendation regarding our Class A common stock adversely, the trading price and trading volume of our Class A common stock could decline.
These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and to cause us to take other corporate actions they desire, any of which, under certain circumstances, could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock, and could also affect the price that some investors are willing to pay for our Class A common stock.
Even if a license were available, we could be required to pay significant royalties, which would increase our expenses. As a result, we could be required to develop alternative non-infringing technology, branding or marks, which could require significant effort and expense.
As a result, we could be required to develop alternative non-infringing technology, branding or marks, which could require significant effort and expense.
Failure to comply with governmental laws and regulations or contractual requirements could harm our business, and we have been, and expect to be, the subject of legal and regulatory inquiries, which may result in monetary payments or may otherwise negatively impact our reputation, business, and results of operations.
Even if we are able to successfully manage the risks of our own non-U.S. operations, our business may be adversely affected if our business partners are not able to successfully manage these risks. 42 Table of Contents Failure to comply with governmental laws and regulations or contractual requirements could harm our business, and we have been, and expect to be, the subject of legal and regulatory inquiries, which may result in monetary payments or may otherwise negatively impact our reputation, business, and results of operations.
We have considered the impact of Pillar Two rules and determined that we became subject to such rules starting January 1, 2024 in some jurisdictions, but we do not believe that such developments will have a material impact on our financial condition or results of operations in the future.
We have considered the impact of the currently enacted Pillar Two rules and determined that we became subject to certain rules starting January 1, 2024 in some jurisdictions, and it did not have a material impact on our financial condition or results of operations for the year ended December 31, 2025.
Any negative outcome from such inquiries or investigations or failure to prevail in any possible civil or criminal litigation could adversely affect our business, reputation, financial condition, results of operations, and growth prospects. 42 Table of Contents We have previously been, and are currently, or in the future may become, involved in a number of legal, regulatory, and administrative inquiries and proceedings, and unfavorable outcomes in litigation or other of these matters could negatively impact our business, financial conditions, and results of operations.
We have previously been, and are currently, or in the future may become, involved in a number of legal, regulatory, and administrative inquiries and proceedings, and unfavorable outcomes in litigation or other of these matters could negatively impact our business, financial conditions, and results of operations.
In August 2020, we granted two of our Founders, Mr. Karp, our Chief Executive Officer and a member of our Board of Directors, and Mr.
Karp, our Chief Executive Officer and a member of our Board of Directors, and Mr.
As of December 31, 2024, our Founders were 57, 57, and 42 years old.
As of December 31, 2025, our Founders were 58, 58, and 43 years old.
Under our amended and restated certificate of incorporation, our Founders have the right to challenge the calculation of the voting power of the Class F common stock. Such a challenge may cause delays in the certification of any vote of our stockholders or in the effectiveness of any action of our stockholders.
Under our amended and restated certificate of incorporation, our Founders have the right to challenge the calculation of the voting power of the Class F common stock.
We currently intend to retain any future earnings to finance the operation and expansion of our business, as well as to fund our Share Repurchase Program, and we do not anticipate declaring or paying any dividends to holders of our capital stock in the foreseeable future. In addition, our credit facility contains restrictions on our ability to pay dividends.
We do not expect to pay dividends in the foreseeable future. We have never declared nor paid cash dividends on our capital stock. We currently intend to retain any future earnings to finance the operation and expansion of our business and we do not anticipate declaring or paying any dividends to holders of our capital stock in the foreseeable future.
We record an asset for the future tax benefits from unused U.S. federal, state, and foreign net operating losses (“NOLs”) and tax credits subject to a full valuation allowance. Federal, state, and foreign taxing bodies often place limitations on NOLs and tax credit carryforward benefits. As a result, we may not be able to utilize our NOLs and tax credits.
We may not be able to utilize a significant portion of our net operating loss carryforwards and tax credits, which could adversely affect our results of operations. We record an asset for the future tax benefits from unused U.S. federal, state, and foreign net operating losses (“NOLs”) and tax credits subject to a full valuation allowance.
These claims could also result in our having to stop using technology, branding or marks found to be in violation of a third party’s rights and any necessary rebranding could result in the loss of goodwill. We could be required to seek a license for the intellectual property, which may not be available on commercially reasonable terms or at all.
These claims 36 Table of Contents could also result in our having to stop using technology, branding or marks found to be in violation of a third party’s rights and any necessary rebranding could result in the loss of goodwill.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThese equity securities are often in early- or growth-stage companies that have minimal public trading history; as such the fair value of these equity securities, and the value of our equity holdings, may fluctuate depending on the financial outcome and prospects of the issuers, as well as global market conditions, including ongoing volatility related to the Russia-Ukraine and Israel conflicts, and heightened interest rates.
Biggest changeThese equity securities are often in early- or growth-stage companies that have minimal public trading history; as such the fair value of these equity securities, and the value of our equity holdings, may fluctuate depending on the financial outcome and prospects of the issuers, as well as global market conditions, including ongoing volatility related to global conflicts, fluctuating interest rates, or the potential or actual imposition of tariffs or other impacts on trade relations.
We have experienced, and may continue to experience, fluctuations in net income (loss) as a result of transaction gains or losses related to remeasuring certain asset and liability balances that are denominated in foreign currencies. These exposures may change over time as business practices evolve and economic conditions change.
We have experienced, and may continue to experience, fluctuations in net income as a result of transaction gains or losses related to remeasuring certain asset and liability balances that are denominated in foreign currencies. These exposures may change over time as business practices evolve and economic conditions change.
If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition, or results of operations. 79 Table of Contents
If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition, or results of operations. 80 Table of Contents
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risks in the ordinary course of our business, which primarily relate to fluctuations in the value of our investments, interest rates, foreign currency exchange, and inflation. Market Risk As of December 31, 2024, we held publicly-traded equity securities valued at $20.8 million.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risks in the ordinary course of our business, which primarily relate to fluctuations in the value of our investments, interest rates, foreign currency exchange, and inflation. 79 Table of Contents Market Risk As of December 31, 2025, we held publicly-traded equity securities valued at $23.4 million.
As of December 31, 2024, we held privately-held equity securities valued at $64.9 million. Valuations of our privately-held equity securities are complex due to, among other things, the lack of liquidity and the lack of readily available market data.
As of December 31, 2025, we held privately-held equity securities valued at $170.0 million. Valuations of our privately-held equity securities are complex due to, among other things, the lack of liquidity and the lack of readily available market data.

Other PLTR 10-K year-over-year comparisons