For the March quarter, Palantir posted revenue of $341 million, up 49% from a year ago, and ahead of the company’s own forecast of 45% growth. The Wall Street analyst consensus forecast was $332 million. Adjusted operating margin was 24%, one point higher than guidance. Adjusted profits were 4 cents a share, in line with Street estimates. On a GAAP basis, Palantir lost 7 cents a share.

Adjusted free cash flow was $151 million, up $441 million from a year ago, and way ahead of Wall Street’s forecast of a $28 million loss, giving Palantir an adjusted free cash flow margin for the quarter of 44%. Cash flow from operations was $117 million, up $404 million from a year ago. Adjusted operating margin was 34%, close to the company’s long-term target of 35%.

Palantir said revenues were up 76% for its government business, and 19% for commercial revenue. In Palantir’s U.S. business, commercial revenue was up 72%, while government revenue was up 84%. Overall U.S. revenue was up 81%.

The company said billings were $360 million, up 248%, while remaining performance obligations, an indicator of future growth, were up 129%. 

For the second quarter, Palantir sees revenue of $360 million, up 43%, and ahead of the previous Street consensus at $344 million, with an adjusted operating margin of 23%. 

For the full year, Palantir is projecting adjusted free cash flow “in excess of $150 million,” above the Street consensus at $93 million. Palantir said it continues to expect revenue growth of at least 30% a year through 2025.

CFO David Glazer noted in an interview with Barron’s that the company is seeing “a massive tailwind” in markets where the economy has begun to reopen, including both the U.S. and the U.K. He said conditions are “more muted” in the rest of Europe, where the pandemic continues to be a major issue. 

Glazer added that the company’s surprising improvement in free cash flow in the quarter in part reflects a shift over time in the way customers pay Palantir. He notes that Palabntir historically received large upfront payments on multi-year contracts, but that it has been shifting customers to annualized billing, which should keep cash flow more in line with revenue over time.

Palantir went public in a direct listing last October at $10 a share, closing the first day of trading at $9.73. The stock traded as high as $45 on an intraday basis in January, before recently falling back. On Monday, the stock slumped 6.5% to $18.47, the lowest closing level since November.

Write to Eric J. Savitz at eric.savitz@barrons.com