If you are a Tolkien fan, you most probably know what a Palantir is: an indestructible ball of crystal, used for communication and to see events in whether past or future. One of the story’s villains in The Lord of the Rings, the wizard Saruman, uses a palantir to surveil his enemies. And that exactly is the name of the company in question here: Palantir.
If you haven’t heard of Palantir, well….high time you should. In a nutshell founded by the ever famous, legendary, controversial: Peter Thiel (ex-Board Member @Facebook/ Co-founder @Paypal).
Palantir is prepping to file its S-1 (basically means they are ready to go public sometime in the next few quarters) and the document got leaked to public.
Before we get into the stats, you have to know what Palantir does. Palantir sells data analysis tools and consulting to governments and organizations – focused on the defence agencies – and hence controversial. Basically collecting and synthesizing large sets of data, helping governments and organizations stop plots before they’re carried through to execution.
Now onto the stats:
▩ Lost 579M in 2019
▩ Spends 61% of its revenue on sales and marketing. That’s 450M.
To put things into perspective: cloud storage company, Box spent 138% of its revenue on S&M at the time of filing its IPO.
Salesforce’s S&M spend as a % of its 2018 revenue stands 46%.
Is Palantir’s 61% spend worrisome?
In 2018, Salesforce grew 25% from the previous year riding on that 46% rev spend. Tableau grew 32% YoY on its 51% spend on Sales and Marketing that year.
So Palantir knows it’s game with the 61% of rev spend on S&M. And given most of Palatir’s revenue comes from government contracts and government agencies are not the ones to click on your google ad and go “Okay let me sign up for the demo!” – this spend can be read otherwise: lobbying.
▩ Total customers as of H1 2020: 125
Now that’s wild! Per the leaked filing, in the first half of 2020, 11% of Palantir’s entire revenue came from one single government customer and 10% from another commercial customer. That’s $210M from just two customers!
All said and done, Palantir has been secretive for a good 17 years (it was founded in 2003) and the filing is just the start of many interesting things about the company. When the company goes public, we will have much clarity on the metrics and the measures to bring them in.