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Palantir, Tech’s Next Big IPO, Lost $580M in 2019

21 points by simonpure 6y ago

et2o 6y ago
How did they have revenues of $740 million, expenses of slightly more than $1 billion, but lose $580 million?
- nikanj 6y ago
  Write-downs or similar
sidcool 6y ago
I am yet to understand exactly what Palantir does.
- WanderPanda 6y ago
  I did watch some YouTube videos where Gotham was used a while ago and I remember it to be far from breathtaking...
- Cactus2018 6y ago
  https://news.bloombergtax.com/daily-tax-report/palantir-deal-may-make-irs-big-brother-ish-while-chasing-cheats https://news.bloombergtax.com/daily-tax-report/palantir-deal...
- danpalmer 6y ago
  From what I understand, it's essentially data engineering, and tools on top of data pipelines. They claim to sell products, and those products probably form an underlying part of what clients are buying, but really they are paying for a developer to sit in their office and build ETL code to get data out of their million unmaintained databases into some vaguely coherent system, and then build reporting, views, and simple workflows on top of that data. This doesn't sound like much, but I can understand why that might be transformational for many businesses, to finally have all their data in one place in a way that can be analysed usefully.
sneak 6y ago
https://www.theverge.com/2013/6/29/4478748/california-license-plate-reader-database-palantir https://www.theverge.com/2013/6/29/4478748/california-licens... https://www.theverge.com/2018/2/27/17054740/palantir-predictive-policing-tool-new-orleans-nopd https://www.theverge.com/2018/2/27/17054740/palantir-predict... https://theintercept.com/2017/03/02/palantir-provides-the-engine-for-donald-trumps-deportation-machine/ https://theintercept.com/2017/03/02/palantir-provides-the-en... https://www.businessinsider.com/palantir-took-over-from-google-on-project-maven-2019-12 https://www.businessinsider.com/palantir-took-over-from-goog... I think we are, at least in part, responsible for the behaviors of the companies we own. Being a shareholder is not quite the same as being an LP.
jshaqaw 6y ago
Sales and marketing costs at 60% of revenues last year? My understanding of Palantir is that this isn't some SaaS model where a fixed cost product can be scaled at huge gross margins. This is a niche IT consultancy coming up on two decades of life. Today's stock market of hype dream valuations is their window to offload this to the public and clearly they know it.
- ganoushoreilly 6y ago
  While it's been years since I was in a location with the tech deployed, it was 100% a consulting first gig. Nothing was done without an Palantir Engineer. The sad thing is the extra expenses not accounted for in the contracts too. For example, the clearances / costs were often covered by host agencies (at an extremely steep price) for the analysts, something usually passed on to the vendor to cover. So in a sense, they paid for software, paid for an employee, and paid all the associated fees to clear / maintain the employee. I don't think this flys in the private sector at all and it shows with their limited client base.
  - stevehawk 6y ago
    All clearances are paid for by the government, they are never billed to the vendor. If they charged the contractors then small businesses would never be able to compete. Hell, medium businesses wouldn't be able to compete. There is an estimated cost of said clearances, as needed so the government can try to budget accordingly, but it is not handed down to vendors.
    - ganoushoreilly 6y ago
      I'm not sure I agree. Usually the Prime has negotiated it as part of their fee package, but there is most certainly fees for applying and granting clearances for third parties. There's even more fees for establishing a proper SSO and certifying as well. We had a default 50k cost barrier for any new TS/SCI candidates we put forth. Sometimes this was reimbursed, but it was most definitely a good faith cost we incurred.
bschne 6y ago
Isn't this sort of loss at this scale usually justified, for "product" companies, by saying they'll either run into economies of scale or drive everyone else out of the market, thus becoming profitable eventually? Not even considering if that rationale will work out for certain venture-backed companies that are more product-oriented, how on earth is this supposed to work out for a consulting company like Palantir that doesn't scale like SaaS & the likes?
berbec 6y ago
It staggers me, but losing this amount of money seems to have few negative impacts. Is it investor fomo saying "if others put in enough cash for them to stay afloat after losing $bajillion, they must know something I don't! Calling my trader"?
npv789 6y ago
this is interesting https://techcrunch.com/2020/08/21/leaked-palantir-s-1-shows-company-has-125-customers-after-17-years/ https://techcrunch.com/2020/08/21/leaked-palantir-s-1-shows-...
npv789 6y ago
bubble is coming

21 points by simonpure 6y ago

et2o 6y ago

How did they have revenues of $740 million, expenses of slightly more than $1 billion, but lose $580 million?

nikanj 6y ago
Write-downs or similar

sidcool 6y ago

I am yet to understand exactly what Palantir does.

WanderPanda 6y ago
I did watch some YouTube videos where Gotham was used a while ago and I remember it to be far from breathtaking...
Cactus2018 6y ago
https://news.bloombergtax.com/daily-tax-report/palantir-deal-may-make-irs-big-brother-ish-while-chasing-cheats https://news.bloombergtax.com/daily-tax-report/palantir-deal...
danpalmer 6y ago
From what I understand, it's essentially data engineering, and tools on top of data pipelines. They claim to sell products, and those products probably form an underlying part of what clients are buying, but really they are paying for a developer to sit in their office and build ETL code to get data out of their million unmaintained databases into some vaguely coherent system, and then build reporting, views, and simple workflows on top of that data. This doesn't sound like much, but I can understand why that might be transformational for many businesses, to finally have all their data in one place in a way that can be analysed usefully.

sneak 6y ago

https://www.theverge.com/2013/6/29/4478748/california-license-plate-reader-database-palantir https://www.theverge.com/2013/6/29/4478748/california-licens... https://www.theverge.com/2018/2/27/17054740/palantir-predictive-policing-tool-new-orleans-nopd https://www.theverge.com/2018/2/27/17054740/palantir-predict... https://theintercept.com/2017/03/02/palantir-provides-the-engine-for-donald-trumps-deportation-machine/ https://theintercept.com/2017/03/02/palantir-provides-the-en... https://www.businessinsider.com/palantir-took-over-from-google-on-project-maven-2019-12 https://www.businessinsider.com/palantir-took-over-from-goog... I think we are, at least in part, responsible for the behaviors of the companies we own. Being a shareholder is not quite the same as being an LP.

jshaqaw 6y ago

Sales and marketing costs at 60% of revenues last year? My understanding of Palantir is that this isn't some SaaS model where a fixed cost product can be scaled at huge gross margins. This is a niche IT consultancy coming up on two decades of life. Today's stock market of hype dream valuations is their window to offload this to the public and clearly they know it.

ganoushoreilly 6y ago
While it's been years since I was in a location with the tech deployed, it was 100% a consulting first gig. Nothing was done without an Palantir Engineer. The sad thing is the extra expenses not accounted for in the contracts too. For example, the clearances / costs were often covered by host agencies (at an extremely steep price) for the analysts, something usually passed on to the vendor to cover. So in a sense, they paid for software, paid for an employee, and paid all the associated fees to clear / maintain the employee. I don't think this flys in the private sector at all and it shows with their limited client base.
- stevehawk 6y ago
  All clearances are paid for by the government, they are never billed to the vendor. If they charged the contractors then small businesses would never be able to compete. Hell, medium businesses wouldn't be able to compete. There is an estimated cost of said clearances, as needed so the government can try to budget accordingly, but it is not handed down to vendors.
  - ganoushoreilly 6y ago
    I'm not sure I agree. Usually the Prime has negotiated it as part of their fee package, but there is most certainly fees for applying and granting clearances for third parties. There's even more fees for establishing a proper SSO and certifying as well. We had a default 50k cost barrier for any new TS/SCI candidates we put forth. Sometimes this was reimbursed, but it was most definitely a good faith cost we incurred.

bschne 6y ago

Isn't this sort of loss at this scale usually justified, for "product" companies, by saying they'll either run into economies of scale or drive everyone else out of the market, thus becoming profitable eventually? Not even considering if that rationale will work out for certain venture-backed companies that are more product-oriented, how on earth is this supposed to work out for a consulting company like Palantir that doesn't scale like SaaS & the likes?

berbec 6y ago

It staggers me, but losing this amount of money seems to have few negative impacts. Is it investor fomo saying "if others put in enough cash for them to stay afloat after losing $bajillion, they must know something I don't! Calling my trader"?

npv789 6y ago

this is interesting https://techcrunch.com/2020/08/21/leaked-palantir-s-1-shows-company-has-125-customers-after-17-years/ https://techcrunch.com/2020/08/21/leaked-palantir-s-1-shows-...

npv789 6y ago

bubble is coming