Palantir's Direct Listing IPO: What Investors Need To Know

Palantir's Direct Listing IPO: What Investors Need To Know

One of the most anticipated initial public offerings of the week comes Wednesday with the direct listing of the secretive government and commercial security company Palantir Technologies.

Palantir's Direct Offering: Palantir Technologies Inc NYSE: PLTR is planning on selling 244,233,967 shares via a direct listing. In direct listings, the price of shares is determined by investor demand at the time of the offering.

The Wall Street Journal estimates shares will price around $10, valuing the company at $22 billion.

Spotify Technology SPOT and Slack Technologies WORK both went public with direct listings. Both companies had strong returns upon their market debuts.

Technologies: Palantir was founded by Alexander Karp, Stephen Cohen, and Paypal PYPL co-founder Peter Thiel in 2003.

The company targets the government and commercial sectors with its respective Palantir Gotham and Palantir Foundry platforms.

Palantir had 125 customers in the first half of 2020, covering 36 industries across 150 countries.

Palantir's Market Size: Palantir lists its total addressable market as $119 billion.

The company believes the commercial market is worth $56 billion on the basis of 6,000 companies with $500 million in annual revenue.

The government segment is seen as a $63-billion market, with the U.S. portion representing $26 billion.

In 2019, Palantir's revenue split was 52% commercial and 47% government. The company saw 60% of fiscal 2019 revenue come from international customers.

Palantir's Financials: Palantir reports revenue of $742.6 million in fiscal 2019, for a year-over-year increase of 25%.

Revenue in the first half of fiscal 2020 was $481.2 million, a year-over-year increase of 49%.

The company’s top 20 customers had an average annual revenue of $24.8 million in the first half of fiscal 2020 versus $21.7 million a year ago. The company’s average revenue per customer was $5.6 million for the first half of fiscal 2020 compared to $5.2 million a year ago.

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