LucaMeer
Greetings investors, In the last post about Palantir (here's the link: etoro.tw/4bnA9JY) we provided - I hope it was useful and interesting - a general overview of the company. Now, we will briefly analyze some balance sheet items. We will follow the same procedure used for the brief analysis of $AMD (Advanced Micro Devices Inc) (here's the link: etoro.tw/3xzXt9C). Below, we will compare key indicators from the annual balance sheets, taken as of December 31, 2020 and 2023. The purpose of these brief analyses is not to simply churn out data without context but to show you how, in the long term, companies tend to grow and improve. Revenue Represents the total amount generated from the sale of goods/services. 2020: $1093 million 2023: $2225 million Revenue growth more than doubled over three fiscal years, reflecting significant growth. This is due to the increased adoption of software products in both the government and commercial sectors. Revenue segments 2020: - Government revenue: $610 million (56%) - Commercial revenue: $482 million (44%) 2023: - Government revenue: $1222.2 million (55%) - Commercial revenue: $1002.8 million (45%) The data shows that the proportion between the two segments is almost unchanged, but both have seen substantial growth over the years. Net income Represents the total amount earned by a company after all costs, expenses, and taxes have been deducted from total revenue. 2020: - Net loss: ($1166.3) million 2023: - Net income: $217.3 million The transition from a substantial loss to profitability is the most important and positive development. This indicates an improvement in operational and managerial efficiency and also, undoubtedly, the ability to ride the wave of the AI boom. 2023 was the first year with profits instead of losses, even though 2020 was worse than the previous years in this regard: in 2019, net loss $567 million and in 2018, $571 million. Could 2023 have been the launch pad? In my opinion, yes, and I think Palantir's value will come through in the coming years. Operating expenses Represent the costs incurred by the company for the production and sale of goods/services. 2020: $1913.8 million - R&D: $560.6 million - Sales & marketing: $683.7 million - G&A: $669.4 million 2023: $1673.9 million - R&D: $404.6 million - Sales & marketing: $745 million - G&A: $524.3 million What stands out is that two out of three items have decreased. For sales & marketing, we see an increase which might seem negative, but looking at the generated profit, it has actually paid off compared to 2020. For G&A, the decrease is positive because it indicates better efficiency in terms of profitability, but the same doesn't seem to apply for R&D. The R&D item decreased because in 2020, out of $560.6 million, a total of $357 million was allocated to stock-based compensation, while in 2023 out of $404.6 million, only $98 million was allocated to stock-based compensation. Therefore, the actual spending on R&D has increased, demonstrating Palantir's efforts towards innovation. Cash flow Represents the net amount of cash that flows in and out of a company during a specific period. It is a crucial indicator of a company's financial health, as it reflects its ability to generate sufficient cash to fund operations, pay debts, invest, and return capital to shareholders (Palantir does not currently pay dividends). Below, we analyze the operating cash flow, which represents the cash generated from the company's core operations, such as sales of goods and services. 2020: - Operating cash flow: ($296.6) million - FCF: ($309 million) 2023: - Operating cash flow: $712.18 million - FCF: $698 million Operating cash flow indicates the earnings generated during the period under review, deriving from the company's core activities. With this metric, we can understand how the core business is doing: a notable difference in just 3 years, moving from a negative flow of over $200 million to a positive flow of just over $700 million. A markedly improved efficiency, for many reasons, not least the management's capabilities. Total assets & liabilities Total Assets represent the overall value of all the assets owned by a company, while Total Liabilities represent the overall amount of debts and financial obligations a company owes to third parties. 2020: - Total assets: $2690.5 million - Total liabilities: $1167.9 million 2023: - Total assets: $4522.4 million - Total liabilities: $961.4 million The increase in total assets highlights Palantir's growth and expansion; while total liabilities decrease. The financial position is strong with significant equity. $PLTR (Palantir Technologies Inc.) $SPX500 Continued in the comments.
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