Palantir Technologies Inc. today posted mixed first-quarter financial results and a lower-than-expected revenue guidance, sending its shares tumbling more than 20% on the Nasda exchange.

The Denver, Colorado-based company makes software that enables organizations to collect data from many different sources and analyze it to find insights. The company originally focused on public-sector customers such as the U.S. Department of Defense. Since then, Palantir has also established a presence in the private sector by amassing an installed base of large enterprises. 

Palantir sells separate editions of its software for enterprises and government agencies. The company’s software enables organizations to collect information from databases, “internet of things” devices and other systems into a centralized repository. It also provides tools, such as machine learning algorithms, that can be used to find patterns in information. 

The company generated revenue of $446.3 million in the first quarter ended March 31, a 31% improvement from the same time 12 months earlier. Analysts polled for the Refinitiv consensus estimate had forecasted $443 million.

The revenue that Palantir generates from deals with private-sector companies grew at a significantly faster pace than its overall sales, increasing 54% year-over-year in the first quarter. That increase was driven partly by strong demand among U.S. customers. Palantir reported that U.S. private-sector sales jumped 136% from a year ago. 

Revenue from public-sector customers grew at a slower pace. In the first three months of 2021, Palantir’s government business experienced 16% revenue growth. A few days before today’s earnings report, the company announced that it has inked a $90 million, five-year agreement to supply its software to the U.S. Department of Health and Human Services. 

The company generated a net loss of $101.3 million, an improvement from a $123 million net loss a year earlier. But its adjusted earnings of two cents per share missed the consensus Refinitiv estimate, which forecast four cents.

Palantir’s revenue guidance for the second quarter also fell short of analyst estimates, which was likely another factor behind the drop in its share price today. Palantir is anticipating a “base case of $470 million in revenue” during the second quarter with a “wide range of potential upside to our guidance.” Analysts polled by FactSet were expecting it to forecast $483.7 million for the second quarter. 

The company also reaffirmed its full-year guidance of a 27% adjusted operating margin. And it reaffirmed its longer-term target of maintaining an annual revenue growth rate of 30% or higher through 2025.  

Image: Palantir