Originally published: August 3, 2026 | Updated: October 10, 2026 | By Jenna Lofton, StockHitter.com
The Short Version: Palantir’s latest reported quarter delivered 92.8% revenue growth and a Rule of 40 score of 155. The growth is striking. The valuation still deserves its own argument.
A strong business can still be a volatile stock. Our when-to-sell framework is built around checking the thesis, the price and the risks together. A good quarter does not settle all three.
Key Takeaways
- Q2 2026 revenue hit $1.94 billion, up 92.8% year over year, accelerating from Q1’s 85%. Growth picked up on an already much larger revenue base.
- U.S. commercial revenue reached $764 million, up 149% year over year. Remaining U.S. commercial deal value more than doubled to $6.24 billion, including contract options.
- The Rule of 40 score climbed to 155, up from 145 in Q1. Adjusted operating margin hit 62%, GAAP operating margin hit 47%.
- Full-year 2026 guidance was raised to $8.15-8.16 billion in revenue, representing 82% growth, with adjusted free cash flow guided to $4.50-4.70 billion.
- Q3 is the next financial checkpoint. Management guided to $2.160-2.164 billion in revenue; guidance is an expectation, not a reported result.
A Score That Was Not Supposed to Exist, and Somehow Got Weirder
Quick refresher: Palantir calculates its Rule of 40 by adding year-over-year revenue growth to adjusted operating margin. Other companies sometimes use a cash-flow margin, so check the definition before comparing scores. For Q2, the rounded figures were 93% plus 62%, giving 155. That is an extraordinary combination, but it is not a valuation model. The definition is in Palantir’s August 3 results release.
Palantir’s Rule of 40 score for Q2 2026 was 155. Last quarter it was 145; the quarter before, 127. Growth and adjusted operating margin are improving together. That is worth paying attention to without treating the score as a promise about the share price.
CEO Alex Karp emphasized demand for sovereign AI in the earnings release. That is the commercial opportunity to watch: whether customers keep expanding real production use of the platform.
The Scorecard in Context
The Rule of 40 trend is encouraging: 127 in Q4 2025, 145 in Q1 2026 and 155 in Q2. The same definition needs to be used across periods for that comparison to mean anything.
There is a caveat worth keeping in view. Adjusted operating margin excludes stock-based compensation and related employer payroll taxes. Shareholders still need to consider those costs and potential dilution.
A strong operating score belongs alongside valuation, cash flow and business risks. It cannot make a sell-or-hold decision on its own.
What the Q2 2026 Numbers Actually Say
The headline is $1.94 billion in revenue, up 92.8% year over year. That is an acceleration from Q1’s 85%, rather than the slowdown investors often expect as a business gets bigger.
U.S. commercial revenue is the number I genuinely care about most for this business, and it grew 149% year over year to $764 million. Remaining U.S. commercial deal value more than doubled to $6.24 billion. That measure includes contract options and assumes contracts continue without termination, so it should not be read as guaranteed future revenue.
Total contract value closed across the business reached $3.37 billion, up 49% year over year. GAAP net income attributable to common stockholders was approximately $1.062 billion, with diluted GAAP EPS and adjusted EPS both at $0.41. Adjusted free cash flow was approximately $1.22 billion.