Palantir (PLTR) Gross Profit History: Quarterly Data (2020–2025)
Palantir quarterly gross profit from 2020 Q3 through 2025 Q4, sourced from SEC EDGAR XBRL. Interactive chart, annual totals, and year-over-year growth analysis.
| Quarter | Gross Profit (USD) | YoY Change |
|---|
Source: SEC EDGAR XBRL (GrossProfit). Quarters marked * are derived (annual filing minus prior three quarters). Calendar year quarters shown.
Palantir Gross Profit: 2020–2025
Palantir Technologies (PLTR) generated $1.191 billion in gross profit in Q4 2025 (October–December 2025), reflecting a gross margin of approximately 84.6% — the highest in the company’s public history. Full-year 2025 gross profit reached approximately $3.67 billion, representing a margin of 82% on $4.48 billion in revenue.
Palantir’s gross profit trajectory reflects one of the most significant quality improvements in enterprise software over the past five years. The company’s gross margin sat at just 48.4% in Q3 2020 — dragged down by professional services delivery costs, early platform implementation work, and significant government contract overhead. By 2025, systematic shift toward software-led commercial deployments and the scalability of the AIP platform lifted margins above 82%.
Palantir Annual Gross Profit by Year
| Year | Gross Profit | Gross Margin | YoY Change |
|---|---|---|---|
| 2025 | ~$3,670M | ~82.0% | +59.3% |
| 2024 | ~$2,305M | ~80.4% | +27.5% |
| 2023 | ~$1,768M | ~79.5% | +20.3% |
| 2022 | ~$1,469M | ~77.1% | +22.2% |
| 2021 | ~$1,202M | ~77.9% | — |
Annual gross profit derived from quarterly XBRL data. Source: SEC EDGAR.
Why Gross Margin Expanded So Dramatically
The Q3 2020 gross margin of 48.4% was an anomaly caused by a one-time stock-based compensation charge tied to Palantir’s direct listing. RSUs that had vested but were held back due to lockup agreements were recognized all at once in Q3 2020, inflating cost of revenue in that quarter and depressing gross margin below the company’s true unit economics.
From Q4 2020 onwards, gross margins immediately rebounded into the 78–80% range, reflecting Palantir’s core economics: high-value software platforms with relatively low marginal cost of delivery. Cost of revenue consists primarily of cloud infrastructure (AWS, Azure), professional services labor for implementation, and hardware for on-premise government deployments.
The subsequent margin expansion from 78% (2021) to 82%+ (2025) reflects three dynamics. First, the commercial mix shift: Foundry and AIP commercial contracts carry higher gross margins than government Gotham deployments, which often involve custom implementation work. Second, infrastructure efficiency: Palantir’s platforms became more efficient to host as customer data volumes grew and infrastructure was optimized. Third, services mix: the AIP Boot Camp model reduces implementation services intensity relative to contract value. See Palantir Revenue History for the underlying revenue growth driving gross profit expansion.
Gross Profit as a Window Into Software Quality
Gross profit — not revenue — is the most useful metric for evaluating software business quality because it shows how much money remains after serving customers, before spending on sales, R&D, and G&A. Palantir’s gross profit grew 59% in 2025 while operating expenses grew more slowly, creating the operating leverage that drove operating income to $1.4 billion in 2025 from $310 million in 2024.
For comparison, high-quality enterprise SaaS businesses typically target 75–85% gross margins at scale. Palantir’s 2025 gross margins place it among the highest-margin software companies in the enterprise software sector, comparable to peers like Snowflake (75%) and CrowdStrike (76%) on a GAAP basis.
The gross profit stack also matters for understanding Palantir’s free cash flow generation. With $3.67 billion in gross profit in 2025 and total operating expenses (ex-COGS) of approximately $2.26 billion, the operating leverage inherent in the model produces substantial free cash flow at current growth rates.
Cost of Revenue Composition
Palantir’s cost of revenue includes three primary components: cloud and infrastructure costs for hosting Palantir’s software on behalf of customers; professional services labor for implementation, deployment, and ongoing customer success; and hardware costs for on-premise air-gapped government deployments (notably for classified intelligence work). The professional services component has declined as a share of cost of revenue as AIP deployments self-serve more effectively and as initial deployment complexity is amortized across growing customer bases.
Frequently Asked Questions
What is Palantir’s gross profit margin?
Palantir’s gross profit margin reached approximately 84.6% in Q4 2025, up from 78.9% in Q4 2024. The full-year 2025 gross margin was approximately 82%.
What caused Palantir’s low gross margin in Q3 2020?
The 48.4% gross margin in Q3 2020 was caused by a one-time stock-based compensation charge related to Palantir’s direct listing. RSUs that had been vesting during the pre-IPO lockup period were recognized all at once, inflating cost of revenue in that quarter.
How does Palantir’s gross margin compare to other software companies?
Palantir’s 82%+ gross margin places it among the highest-margin enterprise software companies. Comparable peers like CrowdStrike and Snowflake operate at 75–76% GAAP gross margins, while Palantir’s asset-light AIP model is pushing margins higher.
Is Palantir’s gross margin improving over time?
Yes. Palantir’s gross margin has expanded from approximately 78% in 2021 to over 82% in 2025, driven by the commercial mix shift toward AIP, infrastructure efficiency gains, and declining professional services intensity per dollar of revenue.
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