Shares in Palantir Technologies Inc. surged in late trading after the big-data analytics company beat analysts’ expectations and reported its second profitable quarter.

For its first quarter that ended March 31, Palantir reported earnings of five cents a share before costs such as stock compensation, up from two cents in the same quarter of last year, on revenue of $525 million, up 18% year-over-year. Analysts had expected a four-cent-a-share profit on revenue of $506 million.

Net income came in at $17 million, the second straight quarter Palantir has reported a net profit, and net income from operations came in at $4 million, the first time it has reported positive quarterly net operating income.

The figures were positive all around, with Palantir seeing commercial revenue in the quarter grow 15% year-over-year, to $236 million, while government revenue rose 20%, to $289 million. The company’s customer count grew 41% year-over-year and 7% quarter-over-quarter.

During the quarter, Palantir closed 64 deals worth at least $1 million, 22 worth at least $5 million and eight worth at least $10 million. The company ended the quarter with $2.9 billion in cash, cash equivalents and U.S. treasuring securities on hand, with no debt and $950 million in undrawn upon credit facilities.

“We were profitable again this quarter… and we now anticipate that we will remain profitable each quarter through the end of the year,” Alexander C. Karp, co-founder and chief executive officer of Palantir, said in the company’s earnings release. “The depth of engagement with and demand for our new Artificial Intelligence Platform is without precedent.”

Palantir announced its Artificial Intelligence Platform for both enterprise and military applications in late April. The platform combines large language models with Palantir’s software to deliver effective and compliant AI. The service was not without controversy when it launched, given that Palantir demonstrated how AIP could be used to fight a war, such as in drone reconnaissance, generating attack plans and jamming enemy communications.

For the second quarter of 2023, Palantir said that it would be profitable on a net basis on revenue of between $528 million and $532 million. For the full year, the company expects to be profitable on a net basis, with revenue of $2.185 billion to $2.235 billion.

The numbers were music to the ear of investors, and Palantir’s stock surged over 20% in late trading.

Image: Palantir