How much is Palantir in the consulting business vs. a SaaS? Whenever I read something about it I get IBM vibes, of a company which is partly doing some software platform stuff with a mix of good ol consulting.
How off base is that impression?
How off base is that impression?
This term also allowed them to book much more of their revenues as software licenses than services, which makes them look much more attractive to investors. With it, they were able to get a $20B valuation in the last round, where if they were viewed as a government IT services vendor they would've been lucky to be valued at $0.5B.
Changing the job title of a professional services staff member, whether it's "FDE", "Consultant" or "Customer Success", doesn't change the final gross or operating margins. The financials and economics remain the same whether this is at the deal or firm level.
>>With it, they were able to get a $20B valuation in the last round, where if they were viewed as a government IT services vendor they would've been lucky to be valued at $0.5B.
If Palantir didn't sell a product then you're right that they would be viewed as a services company which drops their valuation multiple. But since they sell a product, and presumably charge license fees for the right to use, their classification as a product company seems to justified from a valuation perspective.
Of the license revenue, I hope (but find it unlikely) management discusses a breakdown subscription (if any), term license revenue and one-time (e.g. perpetual/buyout).