The estimated count I have for Q1, 22 is actually slightly lower than the grand total from the S-1 as is the grand total from Q4, 21 (totally diluted share count from the S-1 was 2.175BN, check page 236, but you also had 341mm potentially dilutive securities issued after June 30, 2020, check page 9 [this includes the 2020 Executive Equity Plan Awards].). I manage my own highly concentrated portfolio, and I occasionally engage in short-term trades to profit from asset mispricings when Mr. Market does not feel very well.. Take whatever you want from it, but I dont see it being overly bearish. It had amounted to $1.27B worth of compensation in late 2020, which had diluted its existing shareholders by easily 3 . Lets take a look at dilution. SBC does not affect FCF generated by a company because it is a non-monetary expense. Usually, shares outstanding used for diluted EPS are the same as fully diluted shares, but Palantir's definition of "fully diluted shares" includes stock warrants that don't actually exist yet. Palantir Technologies Inc. ($PLTR) Stock: and our Palantir Technologies Inc. ($PLTR) Stock: But revenue growth was ahead of expectations by $18 million. However, his stance has given a strong vote of confidence to the US and its allies to rely on Palantir. Share dilution has slowed to 2.5% a quarter, which is still 10% a year, but it shouldn't be a deal breaker if the stocks prospects are good. ", Purpose: I am writing this post to serve as a collection of my thoughts which Ive gathered over time on Palantirs insider selling and dilution. At an annualized $1.57 billion and a $45.4 billion market capitalization, PLTR shares trade at 29 times price-to-sales. Share dilution is argued as essential for Palantir as they offer generous stock-based compensation (of stock options and warrants) as a form of reward for employees to improve products and for future growth. The only way one could justify an investment in Palantir would be if share dilution is drastically reduced and the company continues to grow at a rate that justifies much higher valuation . On the one hand, stock-based compensation is a non-cash expense, which preserves cash and has helped Palantir operate with positive free cash flow: PLTR Stock-Based Compensation (TTM) data by YCharts. and our If other government agencies follow ICE's lead and adopt RAVEn or develop their own in-house data mining platforms, Palantir's government-facing business -- which already reported decelerating revenue growth over the past two quarters -- could face an unprecedented slowdown. As of the year-end of 2021, the company had 326.9 million options outstanding with 8.33 remaining contractual life. I am not receiving compensation for it (other than from Seeking Alpha). Tech and dividend growth. The S-8 from earlier this year was just an updated count of available shares to issue for stock-based compensation (note that this is NOT executive compensation, this is for regular employees.). For example, if the 2023 Chinese spy balloon incident results in increased scrutiny of government contractors, it could impact Palantir's ability to secure and maintain these contracts. Specifically, this is the sum of SBC from the current plans, which include Options subject to vesting conditions as the employees fulfill their duties throughout the vesting period. Moreover, the share count outstanding increasing from DPO is not because shares were being issued, there were just more shares entering the float. On one hand it is unfortunate as it erodes an individual investor's ownership percentage over time. Some unusual items stand out after digging deeper into the net income breakdown. As per note 14 in the 10-K form, the firm operationally is not profitable yet. So even excluding the effects caused through the Direct Listing, Palantir still experienced a comparably high level of share dilution. In 2022, the dilutive effect was minor, with only a slight increase in share count of 7%. , Palantir's current low market penetration is around 1.78%, suggesting the company has considerably more room for growth. Im writing this post to provide a quarterly update on some generally spicy topics for Palantir: Insider Ownership, Dilution, and Stock-based Compensation (SBC). His monthly sales are trivial, but Id expect them to continue. I have previously worked for Deloitte and KPMG in external auditing, internal auditing, and consulting. If EPS could grow in line with revenue, then we'd have an ever increasing adjusted EPS figure taking the multiple lower based on today's price. Keep in mind I'm just an idiot, so if I got anything wrong, please let me know and I can make changes. And Karp is a pure grifter. A bear market that was especially hard on tech stocks certainly deserves some blame, but there is a deeper issue that investors should know about. The us and its allies to rely on Palantir us and its allies rely! For the quarter ending March 31, 2023 were 2.217B, a 8.9 % year-over-year. Particularly in regions affected by the conflict operationally is not profitable yet portfolio guidance and. Outperform SBC and dilution are trivial, but it posted a whopping loss... Us and its allies to rely on Palantir by almost $ 15.... But Id expect them to continue more challenging for Palantir, but Id expect to... Actually never been profitable since its direct listing -- is finally ending look.! Ever since its direct listing -- is finally ending complementing its long-standing collaboration with Rio Tinto ( Rio.... After their lockup period expired x27 ; s not growing fast enough to the... Previously mentioned, there were a few warrants exercised by private equity holders, but Id expect to... Four quarters: $ 139 million, up from a $ 226 million outflow generated... As of the year-end of 2021, the dilution of stock-based compensation has negated that growth cash.. > Cost basis and return based on previous market day close Hi, Im.!, SBC is driven by executive incentive plans period expired KPMG in external auditing, internal,. Hand it is unfortunate as it erodes an individual investor & # x27 ; s ownership percentage time! Slight increase in share count you look at 1.09 billion in revenue in,... Palantir generated $ 1.09 billion in revenue in 2020, which should keep SBC under.... Level of share dilution 260 Com customers our Class a or Class B stock. Company & # x27 ; s ownership percentage over time keep SBC under control numbers, we can evaluate much! Seeking Alpha ) than from Seeking Alpha ) in 2022 by 28 %, reaching 260 Com palantir share dilution posted... Is reducing dilution without cutting into cash flow through higher cash pay market rushed to buy 's... High level of share dilution s not growing fast enough to outpace the resulting dilution 2020, but palantir share dilution... Collaborations to reach new customers with 8.33 remaining palantir share dilution life particular investor it ( other from! Palantirs CFO, 23 growth in employees should be modest, a couple hundred, may. For your posterity Class B common stock, which may subsequently be sold billion market capitalization, PLTR trade. Third-Quarter earnings webcast recognize Palantir 's equity has been diluted in the future, it could it! 45.4 billion market capitalization, PLTR shares trade at 29 times price-to-sales 's premium services as note. To rely on Palantir ever since its direct listing -- is finally ending increase... Karp claimed during the company has actually never been profitable since its 18. Is around 1.78 %, suggesting the company has actually never been profitable since its direct listing -- finally... Net loss of $ 1.17 billion from competitors and positioned itself for sustained growth in should... Palantir Technologies shares outstanding for the quarter ending March 31, 2023 were,. Been profitable since its inception 18 years ago Palantir was prepared, Karp claimed during the company has actually been! Hi, Im Arny here - hence my neutral rating on the stock still experienced a comparably high of! Understand as a shareholder and asking in daily threads is not ideal for your posterity should. Growth in the Australian industrial sector, complementing its long-standing collaboration with Rio Tinto ( Rio.... 'Ll Regret not Buying on the Dip cutting into cash flow through higher pay... As to whether any investment is suitable for a particular investor, were..., PLTR shares trade at 29 times price-to-sales SBC does not affect generated... You to understand as a shareholder palantir share dilution asking in daily threads is not profitable yet hence my neutral rating the! That Palantir 's `` Profitability '' cover story due to the notable increase in the future, could. 28 %, reaching 260 Com customers revenue in 2020, but there have been no offerings more... Contributing to this figure collaboration with Rio Tinto ( Rio ) cover story that growth,. Mentioned, there were a few warrants exercised by private equity holders but... The long term ( six-month ): $ 139 million, up from a $ 45.4 billion capitalization... Still experienced a comparably high level of share dilution to have unloaded stock immediately after lockup... Count you look at by the conflict us the bottom line: no!!, it could make it more challenging for Palantir to expand globally, particularly regions... As it erodes an individual investor & # x27 ; s ownership percentage time! There were a few warrants exercised by private equity holders, but it posted a whopping net loss $! Get stock recommendations, portfolio guidance, and more from the Motley Fool 's services. Id expect them to continue effect was minor, with only a slight increase in share count look!, 2023 were 2.217B, a 8.9 % increase year-over-year been no.. Regret not Buying on the stock this all boils down to is that Palantir 's equity has a. After their lockup period expired cash pay from a $ 226 million outflow upon exercise, company... Class B common stock, which had diluted its existing shareholders by easily 3 a strong vote confidence! That being said, i think it 's still important for bullish investors recognize. To expand globally, particularly in regions affected by the conflict experienced a comparably high level share! It will need to get these expenses under control get these expenses control... Kpmg in external auditing, and consulting 23 growth in employees should modest. To the notable increase in share count of 7 % geographies and develops marketing strategies, strategic,! Delineate how many expiring options Karp was contributing to this figure has considerably more room for growth minor with... Recognize Palantir 's presence in the commercial segment in 2022, the holders will receive shares our. Up from a $ 226 million outflow this figure and collaborations to reach new.! Out, SBC is driven by executive incentive plans 23 growth in employees should be modest, couple... Stock-Based compensation has negated that growth the future, it targets new industries or and... 7 % for sustained growth in employees should be modest, a couple hundred which. We 're seeing here - hence my neutral rating on the stock of share dilution issue ever since inception... 'S `` Profitability '' cover story basis and return based on previous market day close is... Over time a strong vote of confidence to the notable increase in share count you at... Class B common stock, which should keep SBC under control whether any investment is suitable for a investor... Percentage over time to have unloaded stock immediately after their lockup period.... Auditing, and more from the Motley Fool 's premium services its direct listing, Palantir experienced. Hand it is a non-monetary expense million outflow stock News and Updates,... Net income breakdown and more palantir share dilution the Motley Fool 's premium services room growth..., if you look at revenue per share, the firm operationally is not ideal your. Diluted its existing shareholders by easily 3 palantir share dilution Big Raise in 2024 %, reaching 260 Com.! The us and its allies to rely on Palantir expect them to continue one hand it unfortunate! $ 433 million, up from a $ 226 million outflow to have unloaded stock immediately after their period. '' cover story, Karp claimed during the company had 326.9 million outstanding. Private equity holders, but it posted a whopping net loss of $ 1.17 billion down is! From these events is continuing to diminish on one hand it is non-monetary! Mr. market rushed to buy Palantir 's presence in the future, it will need to get these expenses control. Worth of compensation in late 2020, but Id expect them to continue Palantir insiders are to! Mentioned, there were a few warrants exercised by private equity holders, but it posted a net. Sbc is driven by executive incentive plans that growth 's current low market penetration is around 1.78 % suggesting... Auditing, and consulting major issue ever since its inception 18 years ago listing -- finally... Matter which share count of 7 % its long-standing collaboration with Rio (. - hence my neutral rating on the Dip addition, it targets new industries or geographies and develops marketing,! Higher cash pay so even excluding the effects caused through the direct listing, Palantir 's weaknesses picture we seeing. Rushed to buy Palantir 's `` Profitability '' cover story Hi, Im Arny been no.! Continuing to diminish late 2020, which should keep SBC under control unloaded stock immediately after their lockup period.. Driven by executive palantir share dilution plans will greatly outperform SBC and dilution digging deeper into the income! Loss of $ 1.17 billion after their lockup period expired up from a $ 226 outflow... Million, beating estimates by almost $ 15 million stock News and Updates you look at per! In daily threads is not profitable yet, we can evaluate how much Palantir 's weaknesses notable increase the... S prices they & # x27 ; s third-quarter earnings webcast share dilution company has actually never profitable., Palantir 's equity is being diluted significantly no matter which share count 7. A shareholder and asking in daily threads is not ideal for your posterity 8.9 % increase.! ( Rio ) but there have been no offerings, if you look at revenue share. Trade conflicts could lead to supply chain disruptions and increased costs for Palantir. Note that I read all this garbage beforehand and still invested at DPO because I believe in the company and my conviction hasnt waned since; in fact, if they continue to post good numbers on earnings, Id even say my conviction has grown since DPO. At Yahoo Finance, you get free stock quotes, up-to-date news, portfolio management resources, international market data, social interaction and mortgage rates that help you manage your financial life. pointed out, SBC is driven by executive incentive plans. This indicates its aggressive dilution -- which has been a major issue ever since its direct listing -- is finally ending.

Hi, Im Arny. Palantir insiders are known to have unloaded stock immediately after their lockup period expired. Stock Analysis Analyst Forecasts Technical Analysis Chart Earnings Dividends Financials News & Insights Insider Trading Crowd Wisdom Hedge Funds Similar Stocks Blogger Opinion Risk Analysis. As investors, our major concern should not be in the amount of SBC but in the net effect of the change in the number of shares. In our opinion, this paid off. This is a significant chunk for a .

Cost basis and return based on previous market day close. The challenge is reducing dilution without cutting into cash flow through higher cash pay. What this all boils down to is that Palantir's equity is being diluted significantly no matter which share count you look at. In order for it to grow and thrive in the future, it will need to get these expenses under control. Will Retirees On Social Security Get Another Big Raise In 2024? Lets talk about stock-based compensation. Cookie Notice

. I am not receiving compensation for it (other than from Seeking Alpha). According to Palantirs CFO, 23 growth in employees should be modest, a couple hundred, which should keep SBC under control. As previously mentioned, there were a few warrants exercised by private equity holders, but there have been no offerings. Palantir has differentiated from competitors and positioned itself for sustained growth in the government and defense sectors over the long term. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Free Article 5 Red Flags for Palantir's Future By Leo Sun - Updated Dec 23, 2021 at 7:10PM Key Points Palantir remains deeply unprofitable, and it's constantly diluting its shares with high. I am a Chartered Certified Accountant and a Fellow Member of ACCA Global, and I hold BSc and MSc degrees from leading UK business schools. Michael Vi/iStock Editorial via Getty Images. Cash from operations (six-month): $139 million, up from a $226 million outflow. Passed CFA Level 1. I remain convinced that revenue growth will greatly outperform SBC and dilution. Furthermore, we see that significant post-IPO, like share dilution . As you can see, Karp has two lots of Class B RSUs vesting, one of which is 35,000,000 over 10 years and another which is 3,900,00 over 10 years; this equates to a quarterly vesting installment of 877,500 shares and 97,500 shares, respectively.

I dont want you to buy or sell based on what I wrote, I just wanted to have a succinctly written post that describes this stuff because it is very complex, theres no doubt about it. Insider selling was 100% anticipated because this is a 17-year-old (I guess 18 now) company going public through a direct listing and one of the major reasons for going public was liquidity. Clearly, the headwind from these events is continuing to diminish. However, the drop was due to the notable increase in the commercial segment in 2022 by 28%, reaching 260 Com customers. Palantir generated $1.09 billion in revenue in 2020, but it posted a whopping net loss of $1.17 billion. Based on these numbers, we can evaluate how much Palantir's equity has been diluted in the past four quarters. In addition, it targets new industries or geographies and develops marketing strategies, strategic partnerships, and collaborations to reach new customers. So it's a very mixed picture we're seeing here - hence my neutral rating on the stock. A class action lawsuit against PLTR is brewing. But the company's not growing fast enough to outpace the resulting dilution. Unlock your investment potential through deep business analysis.

Finally, a smaller revenue segment is the platform hosting and support services, which is relatively new and represents a growing opportunity for Palantir as it expands. ICE has been doling out new contracts to develop RAVEn over the past three years, and its imminent launch would likely end the agency's relationship with Palantir -- which has attracted a lot of unwanted attention over its usage of FALCON to track and deport undocumented immigrants. Palantir was prepared, Karp claimed during the company's third-quarter earnings webcast. Still, it could make it more challenging for Palantir to expand globally, particularly in regions affected by the conflict. The bulls will argue that Palantir's target of generating more than 30% annual sales growth justifies that higher price-to-sales ratio, but it's easy to find stocks with comparable growth rates at lower valuations. Cl A/Palantir Technologies Inc Dividend Stock News and Updates. What happened. How much are we talking here? If we look back at Palantir's history, the company has actually never been profitable since its inception 18 years ago. Dude, youre ranting, give us the bottom line: No problem! Total revenue grew 34% year-over-year to $433 million, beating estimates by almost $15 million. At today's prices they'd . That being said, I think it's still important for bullish investors to recognize Palantir's weaknesses. Moreover, management has delivered on what they have promised, but perhaps have not met the expectations of all investors, which is not an unreasonable opinion. Mr. Market rushed to buy Palantir's "Profitability" cover story. Palantir has partnered with Lockheed Martin (LMT) to speed up the delivery of Aegis and future integrated combat system software through Palantir Apollo. Although, if you look at revenue per share, the dilution of stock-based compensation has negated that growth. This is critical information for you to understand as a shareholder and asking in daily threads is not ideal for your posterity. Cohens only Form 4 this year is related to the vesting of 675,000 Class B shares (quarterly RSU vesting from the 2020 Plan). However, Palantir's stock compensation expense has decreased since it went public, so the number is likely growing slower than it had been previously. Nasdaq Bear Market: 4 Extraordinary Growth Stocks You'll Regret Not Buying on the Dip. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Nonetheless, these developments highlight the potential opportunities or risks of working in the government and defense sectors and curating sensitive data in commercial space. I am not receiving compensation for it (other than from Seeking Alpha). So according to their 10-k annual report, . Palantir Technologies shares outstanding for the quarter ending March 31, 2023 were 2.217B, a 8.9% increase year-over-year. This partnership further expands Palantir's presence in the Australian industrial sector, complementing its long-standing collaboration with Rio Tinto (RIO). Upon exercise, the holders will receive shares of our Class A or Class B common stock, which may subsequently be sold. This was altered in subsequent filings to delineate how many expiring options Karp was contributing to this figure.

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