Leaked Palantir S-1 shows company has 125 customers after 17 years

We are still walking through Palantir’s leaked S-1, which as of the time of this writing, hasn’t yet been filed and published by the SEC. This morning, we discussed some of Palantir’s financials, including its revenues, margins, and net losses.

The company’s customer base — and it’s high-degree of concentration — is a recurring theme in the leaked S-1 filing that TechCrunch has been reading all day.

Palantir has precisely 125 customers as of the end of the first half of 2020. Palantir notes that customers from different parts of the same government department or company are considered separately (Palantir’s example is that the CDC and NIH are both part of the Department of Health and Human Services, but would be billed separately and are thus considered separate customers for the purpose of its calculation).

As of the end of 2019, the average revenue per customer for Palantir was $5.6 million. In comparison to many other SaaS stocks, that is a gargantuan number, but mostly driven by the fact that Palantir doesn’t have the soft onboarding strategies of products like Slack or Amazon Web Services, where small organizations can start using a product even though they aren’t massive moneymakers.

Palantir notes that over the past decade, average revenue per customer has increased 30%.

What’s perhaps more worrying though is the sheer revenue concentration of Palantir. The company’s top three customers — which aren’t disclosed — together represented 28% of the company’s revenue for 2019. Its top twenty customers represented 67% of total revenues, with each one of those customers averaging $24.8 million in revenue.

As we reported this morning, 53.5% of the company’s revenue is derived from government contracts, with the balance from commercial clients.

Palantir’s filing says that 40% of revenue is generated in the U.S., with 60% generated internationally. The company says that it has clients in 150 countries (of course, reconciling 150 countries with 125 customers is left as a math exercise for the reader).

Palantir sees great growth opportunities in both its government and commercial businesses. On the government side, the company said in its note to shareholders that:

The systemic failures of government institutions to provide for the public — fractured healthcare systems, erosions of data privacy, strained criminal justice systems, and outmoded ways of fighting wars — will continue to require both the public and private sectors to transform themselves. We believe that the underperformance and loss of legitimacy of many of these institutions will only increase the speed with which they are required to change.

Palantir argues that its total addressable market is $119 billion.