To The Moon

$Palantir Technologies Inc.(PLTR)$  

3 Nov 2026 | Q3 2026 results (unaudited release)

Revenue grew +95.9%. New bookings grew +6%.

Bookings (total contract value, TCV) were 1.26x quarterly revenue, the lowest of the six quarters with a disclosed total TCV. A year ago (Q3 2025) the ratio was 2.34x. Last quarter it was 1.74x.

So is Palantir using up its backlog faster than it refills it? My read: not proven either way. Here is how I check it, on this name or any software name.

Why the two numbers can disagree

TCV is the full value of contracts signed in the quarter. If a customer signs the same yearly amount for one year instead of two, TCV halves while revenue does not move. A falling TCV can mean shorter contracts, not weaker demand.

Three cross-checks, reusable anywhere

1. TCV against revenue: 1.26x now, 2.34x a year ago.

2. Backlog against revenue, quarter on quarter. US commercial remaining deal value (RDV) grew +4.5% while US commercial revenue grew +28.8%. Revenue is being recognised faster than that backlog is growing.

3. Net dollar retention: 165%, up 8 points q/q, per the company's call and deck. Existing customers are spending more, not less.

Check 2 says "backlog is being drawn down". Check 3 says "demand is fine". That split is why I don't call it either way.

What management said

On the call, the CFO said several eight-figure deals were "shorter in duration than usual" because customers moved fast, and that he expects duration and size to increase. No number came with that.

What is missing

Palantir's footnotes still define TCV growth on a dollar-weighted duration basis. Neither the Q3 release nor the call gave that figure. It is the one number that would test the shorter-contracts story directly. Not an accusation, just the gap to watch.

The counter-case, with real space

Over the last 12 months, US commercial TCV was about $6.1B, +62% on the prior 12 months (my sum of the quarterly releases; the CFO quoted $6.114B).

That is about 1.72x the full-year US commercial revenue guide of more than $3,559M. One soft quarter inside a +62% year looks lumpy, not stalled.

It has also happened before. TCV/revenue fell to 1.48x in Q1 2026, then recovered to 1.74x in Q2.

What would change my mind

A second quarter of US commercial RDV growing far slower than US commercial revenue, with still no duration-basis TCV. Then the backlog story beats the duration story.

Dated tests

(a) Q4 print (last year's came on 2 Feb): US commercial TCV growth back above revenue growth, or a duration-basis TCV figure returns.

(b) 10-Q: RDV and remaining performance obligation detail.

(c) PLTR's leg (12.4%) of our 31 Oct implied-move test is scored at the 3 Nov US close (about 05:00 SGT 4 Nov); the full 3-name test (PLTR, AMD, APP) closes 5 Nov.

Context: $173.67 after hours (08:39 SGT 3 Nov), 121.4x trailing GAAP earnings. At that multiple, the bookings question matters more than the beat.

A hypothetical book, made-up units

Say a software customer pays 100 units a year. Signed for two years, TCV is 200. Renewed next year for one year at 110 units, TCV is 110: bookings "fall" 45% while revenue rises 10%. Same customer, more spend, worse-looking bookings. That is why I never read TCV alone.

Honest limits

- Unaudited release; the 10-Q is not filed yet.

- Retention and the CFO quotes come from the call transcripts and deck, not the release.

- One quarter is not a trend; the ratio history is only six quarters long.

- Earnings quality: Q3 tax was 1.2% of pre-tax income. At the 23% long-term rate Palantir itself uses for adjusted EPS, GAAP EPS would be about $0.34, not $0.44 (hypothetical, math is mine).

After reading this you can

- Read any software company's bookings with three cross-checks instead of one headline.

- Check whether a "shorter contracts" explanation comes with a number.

- Score this read yourself at the Q4 print.

Question for you: when bookings and revenue split like this, which cross-check do you trust first?

Not advice. I may hold positions in the names mentioned.

Stop guessing. Start calculating.

Live to fight another day. 🤙

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