Palantir Technologies has once again adjusted its annual revenue forecast upward due to increased demand for its AI services among businesses and government agencies.

The data analytics and defence software provider now anticipates revenue between $4.14bn and $4.15bn for the year. This revision exceeds both its earlier estimate and the average analyst forecast of $3.9bn, as reported by the London Stock Exchange Group (LSEG).

This marks Palantir’s second revenue forecast revision in 2025, following an initial update in May, when the company raised its full-year revenue projection to a range of $3.89bn to $3.9bn.

Palantir is benefiting from a focus on national security in the US and changes in the Pentagon’s software procurement strategy favouring commercial and “non-traditional” providers, according to a report in Reuters.

Recently, the US Army indicated potential service purchases from Palantir amounting to $10bn over a decade.

Palantir’s shares rose by 4% in extended trading, and have more than doubled in 2025. This growth has been driven by investors’ confidence in the company’s ability to capitalise on AI advancements and increased government spending on defence technology.

In the second quarter of 2025, US government sales for the company increased by 53% to $426m. This represents more than 42% of total quarterly revenue, which reached approximately $1bn.

For the full year 2025, Palantir anticipates US business revenue to exceed $1.3bn, up from earlier guidance of more than $1.18bn.

The company posted a 68% year-on-year increase in total US revenue to $733m for the second quarter ending 30 June 2025. Palantir reported GAAP net income of $327m, representing a 33% margin.

In terms of contracts, Palantir closed 157 deals worth at least $1m each, including 66 deals of at least $5m and 42 deals worth more than $10m. The total contract value reached $2.27bn, marking a 140% increase year-over-year.

Palantir co-founder and CEO Alex Karp said: “This was a phenomenal quarter. We continue to see the astonishing impact of AI leverage. Our Rule of 40 score was 94%, once again obliterating the metric.

“Year-over-year growth in our US business surged to 68%, and year-over-year growth in US commercial climbed to 93%. We are guiding to the highest sequential quarterly revenue growth in our company’s history, representing 50% year-over-year growth.”

In June 2025, Palantir formed a partnership with Accenture Federal Services to deliver AI-powered solutions to US federal agencies, aiming to enhance operational efficiency and decision-making.