Palantir Technologies reported strong fourth-quarter earnings results Monday afternoon. Its shares were up 5% in after-hours trading.

Adjusted earnings-per-share were 25 cents, above Wall Street's consensus estimate of 23 cents, and up from 14 cents last year. Revenue for the quarter reached $1.41 billion, ahead expectations for $1.34 billion, and up 70% on the year.

CEO Alex Karp said the company's financial results "have again exceeded even our most ambitious expectations."

"Such a massive acceleration in growth, for a company of this scale and size, is a remarkable achievement -- a cosmic reward of sorts to those who were interested in advancing our admittedly idiosyncratic project and embraced, or at least did not wholly reject, our mode of working," Karp said.

William Blair's Louie DiPalma said he liked what he saw from the report. "In our view, shares will trend back above $200 per share over the next year," he wrote in a Monday afternoon note to clients.

Sales in Palantir's core U.S. market were up 93% from a year ago. As has been the case recently, commercial revenue was the standout, up 137% to $507 million. Sales to the U.S. government reached $570 million, up 66%. U.S. quarterly revenue broke above $1 billion for the first time.

Though Palantir has more trouble selling overseas, international sales were still up 22% year-over-year.

Palantir also issued first-quarter and full-year 2026 guidance well in excess of current analyst projections.

In the fourth quarter the company posted a 41% operating margin, continuing a strong trend for profitability. For 2025, it converted 47% of sales to free cash flow and now has over $7 billion in cash and marketable securities.

This is breaking news. Read a preview of Palantir's earnings below and check back for more analysis soon.

Palantir enters earnings season with its usual high expectations ahead of its fourth-quarter report after the stock market closes Monday.

Wall Street analysts are projecting fourth-quarter adjusted earnings of 23 cents a share, compared with 14 cents the year before. Revenue is projected to come to $1.34 billion, marking a 62% jump from 2024.

Palantir helps large organizations sort through their mountains of data and make sense of it using artificial intelligence. It aids decision-makers in seeing connections and courses of action that may not have been obvious before.

The company's roots are in intelligence and defense work, and Palantir has seen an acceleration of its already extensive contracts with the U.S. federal government. Most recently, in December, the company announced a new contract with the U.S. Navy worth up to $448 million.

But Palantir has expanded beyond its government roots as large companies struggle to manage and interpret the seas of data they produce every day. This may be Palantir's biggest opportunity, because all large data-rich organizations can benefit from its software. The U.S. is again the core market here.

Analysts project that U.S. revenue will surge by 80% in the fourth quarter, breaching $1 billion in quarterly sales for the first time. Commercial sales are expected to lead the way, seen rising an estimated 121%. These growth rates are similar to what Palantir reported last quarter.

U.S. revenue will likely compose about three-quarters of the total for Palantir, up from 67% a year ago. Palantir has more trouble selling to large continental European organizations, and the geopolitical circumstances at the root of those troubles appear to be deepening.

Palantir is fairly unique among fast-growing software companies in that it is very profitable. In the last 12 months, the company posted a 46% free-cash-flow margin, and its cash pile continues to grow.

Ahead of the earnings report, William Blair analyst Louie DiPalma upgraded the stock to Outperform from Market Perform, saying a recent selloff had created a buying opportunity.

Palantir hasn't been immune from recent trepidation around software stocks, DiPalma wrote Monday. While the market reaction to earnings "will surely be volatile," the analyst expects a positive move.

"Although Palantir's valuation is still frothy, it appears more reasonable relative to recent venture rounds for companies tied to the AI ecosystem," DiPalma added.

Few analysts doubt that Palantir has a long runway for commercial success, but there is concern surrounding its valuation. At a forward price-to-earnings multiple of about 180, it is among the most richly valued stocks, though still behind Tesla's roughly 209 multiple.

In both cases, the stocks are supported by a large base of retail investors who believe in -- and identify with -- the companies, helping to push share prices higher.

Shares rose 2.4% to $150.10 Monday. The tech-heavy Nasdaq Composite was rising slightly. Heading into Monday, Palantir shares have tumbled more than 17% this year against a 0.1% gain for the index.