Palantir, Tech’s Next Big IPO, Lost $580M in 2019 | Hacker News Reader

Palantir, Tech’s Next Big IPO, Lost $580M in 2019

nytimes.com

21 pointssimonpure16 comments

Sales and marketing costs at 60% of revenues last year? My understanding of Palantir is that this isn't some SaaS model where a fixed cost product can be scaled at huge gross margins. This is a niche IT consultancy coming up on two decades of life. Today's stock market of hype dream valuations is their window to offload this to the public and clearly they know it.

While it's been years since I was in a location with the tech deployed, it was 100% a consulting first gig. Nothing was done without an Palantir Engineer. The sad thing is the extra expenses not accounted for in the contracts too. For example, the clearances / costs were often covered by host agencies (at an extremely steep price) for the analysts, something usually passed on to the vendor to cover. So in a sense, they paid for software, paid for an employee, and paid all the associated fees to clear / maintain the employee. I don't think this flys in the private sector at all and it shows with their limited client base.

All clearances are paid for by the government, they are never billed to the vendor. If they charged the contractors then small businesses would never be able to compete. Hell, medium businesses wouldn't be able to compete.

There is an estimated cost of said clearances, as needed so the government can try to budget accordingly, but it is not handed down to vendors.

I'm not sure I agree. Usually the Prime has negotiated it as part of their fee package, but there is most certainly fees for applying and granting clearances for third parties. There's even more fees for establishing a proper SSO and certifying as well. We had a default 50k cost barrier for any new TS/SCI candidates we put forth. Sometimes this was reimbursed, but it was most definitely a good faith cost we incurred.

it would blow my mind if you tell me you know a company that has written a literal check for a security clearance in the last twenty years.

i suspect that cost barrier is more the government saying "we aren't paying for it, you need to find someone that is already cleared."

I am yet to understand exactly what Palantir does.

From what I understand, it's essentially data engineering, and tools on top of data pipelines.

They claim to sell products, and those products probably form an underlying part of what clients are buying, but really they are paying for a developer to sit in their office and build ETL code to get data out of their million unmaintained databases into some vaguely coherent system, and then build reporting, views, and simple workflows on top of that data.

This doesn't sound like much, but I can understand why that might be transformational for many businesses, to finally have all their data in one place in a way that can be analysed usefully.

I did watch some YouTube videos where Gotham was used a while ago and I remember it to be far from breathtaking...

https://news.bloombergtax.com/daily-tax-report/palantir-deal...

https://www.theverge.com/2013/6/29/4478748/california-licens...

https://www.theverge.com/2018/2/27/17054740/palantir-predict...

https://theintercept.com/2017/03/02/palantir-provides-the-en...

https://www.businessinsider.com/palantir-took-over-from-goog...

I think we are, at least in part, responsible for the behaviors of the companies we own. Being a shareholder is not quite the same as being an LP.

How did they have revenues of $740 million, expenses of slightly more than $1 billion, but lose $580 million?

Write-downs or similar

Isn't this sort of loss at this scale usually justified, for "product" companies, by saying they'll either run into economies of scale or drive everyone else out of the market, thus becoming profitable eventually?

Not even considering if that rationale will work out for certain venture-backed companies that are more product-oriented, how on earth is this supposed to work out for a consulting company like Palantir that doesn't scale like SaaS & the likes?

It staggers me, but losing this amount of money seems to have few negative impacts. Is it investor fomo saying "if others put in enough cash for them to stay afloat after losing $bajillion, they must know something I don't! Calling my trader"?

this is interesting

https://techcrunch.com/2020/08/21/leaked-palantir-s-1-shows-...

bubble is coming

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