According to TheRegister.com, Palantir CEO Alex Karp used his Q3 2025 shareholder letter to celebrate the company’s impressive earnings while taking aim at critics. The data analytics company reported $1.2 billion in revenue for the quarter, representing a 63% year-over-year increase, with $476 million in profit. Palantir’s US government business grew 52% to $486 million in revenue, while Karp described the performance as “the single most impressive number I think any enterprise software company has ever seen.” In his letter, Karp criticized financial analysts and commentators for failing to anticipate Palantir’s growth, while also making provocative cultural statements including that “it is and was a mistake to casually proclaim the equality of all cultures and cultural values.” This earnings celebration masks deeper questions about the company’s direction.
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The Rule of 40 Mirage
Karp’s enthusiasm about Palantir’s position on the Rule of 40 metric deserves scrutiny. While the company’s current growth numbers are indeed impressive, the Rule of 40 measures sustainability—not just quarterly performance. Enterprise software companies with Palantir’s scale typically face growth deceleration as they mature, and maintaining 63% growth at this revenue level is historically unprecedented. The company’s own guidance for Q4 suggests growth will moderate to 61%, indicating the peak may already be passing.
The Government Dependency Time Bomb
Palantir’s 52% growth in US government business represents both opportunity and existential risk. As Benzinga’s analysis highlights, government contracts often involve extended payment timelines and political uncertainty. The company’s heavy reliance on federal contracts makes it vulnerable to budget cycles, political shifts, and the kind of government shutdowns that have become increasingly common. When Karp claims on the earnings call that critics are in “deranged and self-destructive befuddlement,” he dismisses legitimate concerns about concentration risk that have sunk other government contractors.
When CEOs Become Cultural Critics
Karp’s invocation of Yeats’s “The Second Coming” and his commentary about cultural hierarchy represent a dangerous pivot for a public company CEO. His statement that “things fall apart; the center cannot hold” and call for “an embrace of common identity that by definition puts forward certain ideas, values, culture, and ways of living at the exclusion of others” ventures far beyond typical corporate communication. This cultural positioning risks alienating customers, employees, and investors who may question whether a company making divisive cultural statements can effectively serve diverse global markets. The apocalyptic tone of Yeats’s poem seems particularly ill-suited for a shareholder letter.
The First Amendment Fallacy
Karp’s most concerning statement comes during the earnings call when he tells corporate leaders: “If you want to have your First Amendment rights to an opinion again, get our unit economics.” This fundamentally misunderstands both constitutional rights and corporate responsibility. First Amendment protections apply to government censorship, not corporate speech consequences. More troubling is the implication that financial success should insulate companies from accountability for their public statements. This philosophy could lead to reckless corporate behavior justified by strong financial performance—a pattern we’ve seen repeatedly in tech history with disastrous results.
The Sustainability Question
While Palantir’s current numbers are extraordinary, the company’s shareholder letter reveals strategic tensions that could undermine long-term success. The combination of aggressive cultural positioning, government contract dependency, and unconventional leadership rhetoric creates multiple single points of failure. History shows that companies that leverage financial success to make controversial cultural statements often face backlash that impacts their core business. As Palantir continues its impressive growth, investors should watch carefully whether the company’s cultural ambitions complement or conflict with its business objectives.
