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These financials are awful for a software business. Gross margin of 67%, even with pilot costs lumped into Sales&Marketing. If you add these pilot costs to COR,

These financials are awful for a software business. Gross margin of 67%, even with pilot costs lumped into Sales&Marketing. If you add these pilot costs to COR, you'd get better numbers manufacturing furniture. -- 2019 Financials ('000s) Revenue: 742,555 Cost of Revenue: 242,373 Gross Profit: 500,182 Sales and Marketing: 450,120 -- Sales and Marketing includes pilot costs "Sales and marketing costs primarily include salaries, stock-based compensation expense, and benefits for personnel involved in executing on pilots and performing other brand building activities, as well as third-party cloud hosting services for our pilots, marketing and sales event-related costs, and allocated overhead. The Company generally charges all such costs to sales and marketing expense in the period incurred."

hrpnk 6y ago
At least it's marketing financed by profit. The other filings (e.g. Asana) showed marketing costs equal to 100% revenue or higher...
- throwawaycow 6y ago
  Asana's is better: - 86% gross margins (122,725 / 142,606) - 86% YoY rev growth (76,770 to 142,606) - 75k paying customers (easy come, easy go) - one-off sale pitches vs one-off lines of code https://www.sec.gov/Archives/edgar/data/1477720/000119312520228462/d855753ds1.htm#fin855753_3 https://www.sec.gov/Archives/edgar/data/1477720/000119312520...
  - nv-vn 6y ago
    Asana's financials are way worse. The margins and revenue growth are useless when they spent 87% of profit on marketing for the last quarter. It seems like it's extremely expensive for them to make new sales and probably not cheap to retain current sales. And even when you take away ALL of those costs, they would have earned less than 1/4 million in the last quarter. If you look at the picture for the whole year it's even more ridiculous -- they would've shown a loss of $14 million in EBITDA if you REMOVED all of their marketing. I really doubt that they'll be able to turn that ship around with any amount of growth considering how much the marketing expenses have grown (36% vs. average of FY2019, or almost 100% y/y).
  - adamlangsner 6y ago
    Why would you mention their revenue growth and gross margin without mentioning their R&D, Marketing, and Sales & Administrative costs. Which have each all doubled YoY. Isn't that misleading? Their Net Loss went from 51M to 119M. So, in 2019 they spent 127M to generate 76M in revenue and in 2020 they spent 261M to generate 142M in revenue. Asana and Palantir both have terrible financials. They've both basically doubled their net loss YoY.
tempsy 6y ago
i think that’s what the “forward deployed engineers” do but given Covid maybe they’re saving a bunch of money on employee travel
sriram_sun 6y ago
Come next recession, IBM might even suck up Palantir for a few billion.
- toomuchtodo 6y ago
  IBM already over leveraged themselves to buy Redhat.
mbesto 6y ago
> These financials are awful for a software business. That's cuz they're not. They are a hybrid services business that also sells "cloud computing". The are very comparable to Cloudera - they have a proprietary analytics platform that they then customize specifically for the workload. They then charge an implementation fees, on-going "maintenance", and a subscription fee for the "software" (which is basically a highly customized single tenant). > Gross margin of 67% Which is still better than IBM or any professional services firm could ever achieve from the government. > If you add these pilot costs to COR, you'd get better numbers manufacturing furniture. If you added S&M costs to revenue attributed to a multi-year subscription fee, you'd be called an idiot. Hence why they are probably not in there (could be wrong...we don't know for sure). I do not like Palantir in the slightest, but this assessment is kinda off.
- stu2b50 6y ago
  Their private valuation is more SaaS like, though. Revenue of 724 million, last private valuation of 20 billion, which is a 26x revenue multiplier. IBM, on the other hand, has a 2x revenue multiplier. Maybe this isn't the best metric to use, and Palantir does have better margins, but I just can't see these numbers being worth their current valuation as a services business.
  - mbesto 6y ago
    > Maybe this isn't the best metric to use You're right. Discounted Cash Flow is.
- hendzen 6y ago
  Cloudera... you mean the same Cloudera that has basically traded below the IPO price for years?

hrpnk 6y ago

At least it's marketing financed by profit. The other filings (e.g. Asana) showed marketing costs equal to 100% revenue or higher...

throwawaycow 6y ago
Asana's is better: - 86% gross margins (122,725 / 142,606) - 86% YoY rev growth (76,770 to 142,606) - 75k paying customers (easy come, easy go) - one-off sale pitches vs one-off lines of code https://www.sec.gov/Archives/edgar/data/1477720/000119312520228462/d855753ds1.htm#fin855753_3 https://www.sec.gov/Archives/edgar/data/1477720/000119312520...
- nv-vn 6y ago
  Asana's financials are way worse. The margins and revenue growth are useless when they spent 87% of profit on marketing for the last quarter. It seems like it's extremely expensive for them to make new sales and probably not cheap to retain current sales. And even when you take away ALL of those costs, they would have earned less than 1/4 million in the last quarter. If you look at the picture for the whole year it's even more ridiculous -- they would've shown a loss of $14 million in EBITDA if you REMOVED all of their marketing. I really doubt that they'll be able to turn that ship around with any amount of growth considering how much the marketing expenses have grown (36% vs. average of FY2019, or almost 100% y/y).
- adamlangsner 6y ago
  Why would you mention their revenue growth and gross margin without mentioning their R&D, Marketing, and Sales & Administrative costs. Which have each all doubled YoY. Isn't that misleading? Their Net Loss went from 51M to 119M. So, in 2019 they spent 127M to generate 76M in revenue and in 2020 they spent 261M to generate 142M in revenue. Asana and Palantir both have terrible financials. They've both basically doubled their net loss YoY.

tempsy 6y ago

i think that’s what the “forward deployed engineers” do but given Covid maybe they’re saving a bunch of money on employee travel

sriram_sun 6y ago

Come next recession, IBM might even suck up Palantir for a few billion.

toomuchtodo 6y ago
IBM already over leveraged themselves to buy Redhat.

mbesto 6y ago

> These financials are awful for a software business. That's cuz they're not. They are a hybrid services business that also sells "cloud computing". The are very comparable to Cloudera - they have a proprietary analytics platform that they then customize specifically for the workload. They then charge an implementation fees, on-going "maintenance", and a subscription fee for the "software" (which is basically a highly customized single tenant). > Gross margin of 67% Which is still better than IBM or any professional services firm could ever achieve from the government. > If you add these pilot costs to COR, you'd get better numbers manufacturing furniture. If you added S&M costs to revenue attributed to a multi-year subscription fee, you'd be called an idiot. Hence why they are probably not in there (could be wrong...we don't know for sure). I do not like Palantir in the slightest, but this assessment is kinda off.

stu2b50 6y ago
Their private valuation is more SaaS like, though. Revenue of 724 million, last private valuation of 20 billion, which is a 26x revenue multiplier. IBM, on the other hand, has a 2x revenue multiplier. Maybe this isn't the best metric to use, and Palantir does have better margins, but I just can't see these numbers being worth their current valuation as a services business.
- mbesto 6y ago
  > Maybe this isn't the best metric to use You're right. Discounted Cash Flow is.
hendzen 6y ago
Cloudera... you mean the same Cloudera that has basically traded below the IPO price for years?