Trusted by GovernmentsNarrow moat

Palantir Technologies (PLTR) — moat facet

Governments trust Palantir with their most sensitive work and are writing it into their budgets, but a legislature can still cut the budget.

Palantir's oldest advantage is that governments trust it with their most sensitive work. It was founded to build software for the intelligence community in the United States1, and government customers still produced 54% of its revenue in 20252: $2,402.3 million, up 53%3.

Government segment contribution margin (%)12%201857%202058%202260%202466%202571%Q2 2026Palantir Forms 10-K FY2020, FY2022, FY2024, FY2025; Q2 2026 Form 10-Q
From 12% to 71% on government work.

That trust has been built into institutions. The Army consolidated 75 Palantir contracts into one enterprise agreement worth up to $10 billion4; the Pentagon ordered Maven moved into a program of record5; NHS England chose Palantir for its Federated Data Platform6. Each is harder to unwind than a software licence.

The economics have become excellent. Government contribution margin, revenue less the cost of serving and selling to government customers, was 12% in 20187, 60% in 2024 and 66% in 202589, and 71% in the second quarter of 202610.

The limits are the ones every government supplier lives with. Budgets are set by legislatures, contracts can be ended for convenience, and Palantir itself warns of changes in "spending or budgetary priorities"11. The 2018 court ruling that opened defence procurement to Palantir opened it to every commercial vendor too12.

Government work is also the larger profit pool today. The government segment produced $1,576.1 million of contribution in 2025 against $1,366.6 million from commercial customers13. For all the attention on American business, the relationships built over two decades with public bodies still earn Palantir more money than anything else it does.

This facet is narrow and stable: deep relationships, institutionalised by programmes of record, but subject to budgets no moat controls. The government contribution margin is the number to follow; a fall back toward 60% would say governments are using their buying power at renewal.

Moat trajectory: Holding steady

Government contribution margin 71% in Q2 2026; budget risk unchanged.

The number that tests this moat
Reported
Government segment contribution margin, latest quarter
71% (Q2 2026); 63% a year earlier

Profit from government work after serving and selling; a fall toward 60% would mean governments are pushing back on price.

Source: Palantir Form 10-Q, Q2 2026 ↗
Aspects of the moat
DIG DEEPER 01
The 2018 Case That Opened the Army
Palantir sued the Army in 2018 to force it to consider off-the-shelf software, and the Army is now one of its largest customers.
DIG DEEPER 02
Maven: From $480 Million to a Program of Record
Maven is being written into the Pentagon's budget as a program of record, which would make Palantir's software a budget line rather than a renewal.
DIG DEEPER 03
Seventy-Five Army Contracts Folded Into One
The Army folded 75 Palantir contracts, 60 of them as subcontracts, into one agreement that makes Palantir its direct supplier.
DIG DEEPER 04
The NHS and the Allied Governments
Allied governments, led by Britain's health service, have become Palantir's fastest-growing business outside America.
⚠ Threats to the moat
⚠ THREAT 01
Budgets, Priorities and September 30
About 42% of Palantir's revenue depends on American government budgets, which no product advantage can protect.
⚠ THREAT 02
Customers It Will Not Serve
Palantir will not sell to customers whose activities clash with its values, which strengthens government trust and narrows its market.
References
  1. ReportedIt was founded to build software for the intelligence community in the United States, and government customers still produced 54% of its revenue in 2025: $2,402.3 million, up 53%.
    Palantir Technologies prospectus (Form 424B4) for the direct listing - founding history and 2018-2019 results. — 2018-H1 2020 · publ. September 2020 · source ↗
  2. ReportedIt was founded to build software for the intelligence community in the United States, and government customers still produced 54% of its revenue in 2025: $2,402.3 million, up 53%.
    Palantir Technologies Form 10-K for fiscal 2025 - Item 7 MD&A and segment note: segment revenue and contribution, revenue by geography and customer concentration. — FY2025 · publ. 17 February 2026 · source ↗
  3. ReportedIt was founded to build software for the intelligence community in the United States, and government customers still produced 54% of its revenue in 2025: $2,402.3 million, up 53%.
    Palantir Technologies Form 10-K for fiscal 2025 - Item 7 MD&A and segment note: segment revenue and contribution, revenue by geography and customer concentration. — FY2025 · publ. 17 February 2026 · source ↗
  4. ReportedThe Army consolidated 75 Palantir contracts into one enterprise agreement worth up to $10 billion; the Pentagon ordered Maven moved into a program of record; NHS England chose Palantir for its Federated Data Platform.
    Breaking Defense, the Army consolidates 75 Palantir software contracts, 15 as prime and 60 as subcontractor, into one deal worth up to $10 billion. — August 2025 · publ. 1 August 2025 · source ↗
  5. ReportedThe Army consolidated 75 Palantir contracts into one enterprise agreement worth up to $10 billion; the Pentagon ordered Maven moved into a program of record; NHS England chose Palantir for its Federated Data Platform.
    DefenseScoop, the Deputy Defense Secretary's memorandum to transition the Maven Smart System into a formal program of record by the end of the fiscal year. — April 2026 · publ. 15 April 2026 · source ↗
  6. ReportedThe Army consolidated 75 Palantir contracts into one enterprise agreement worth up to $10 billion; the Pentagon ordered Maven moved into a program of record; NHS England chose Palantir for its Federated Data Platform.
    The Stack, NHS England awards Palantir the Federated Data Platform contract worth 330 million pounds. — November 2023 · publ. 22 November 2023 · source ↗
  7. ReportedGovernment contribution margin, revenue less the cost of serving and selling to government customers, was 12% in 2018, 60% in 2024 and 66% in 2025, and 71% in the second quarter of 2026.
    Palantir Technologies Form 10-K for fiscal 2020 - the direct listing, segment contribution for 2018-2020, revenue by country and employees. — FY2020 · publ. March 2021 · source ↗
  8. ReportedGovernment contribution margin, revenue less the cost of serving and selling to government customers, was 12% in 2018, 60% in 2024 and 66% in 2025, and 71% in the second quarter of 2026.
    Palantir Technologies Form 10-K for fiscal 2024 - US commercial and government revenue for 2024, segment contribution for 2022-2024, top-twenty customer revenue and industries served. — FY2024 · publ. February 2025 · source ↗
  9. ReportedGovernment contribution margin, revenue less the cost of serving and selling to government customers, was 12% in 2018, 60% in 2024 and 66% in 2025, and 71% in the second quarter of 2026.
    Palantir Technologies Form 10-K for fiscal 2025 - Item 7 MD&A and segment note: segment revenue and contribution, revenue by geography and customer concentration. — FY2025 · publ. 17 February 2026 · source ↗
  10. ReportedGovernment contribution margin, revenue less the cost of serving and selling to government customers, was 12% in 2018, 60% in 2024 and 66% in 2025, and 71% in the second quarter of 2026.
    Palantir Technologies Form 10-Q for the quarter ended 30 June 2026 - segment revenue and contribution, US revenue, remaining performance obligations, top-twenty customers and share count. — Q2 2026 · publ. 4 August 2026 · source ↗
  11. ReportedBudgets are set by legislatures, contracts can be ended for convenience, and Palantir itself warns of changes in "spending or budgetary priorities".
    Palantir Technologies Form 10-K for fiscal 2025 - Item 1A risk factors: contract terminations, government budgets, sales cycle, AI regulation and the founders' voting control. — FY2025 · publ. 17 February 2026 · source ↗
  12. ReportedThe 2018 court ruling that opened defence procurement to Palantir opened it to every commercial vendor too.
    Palantir Technologies Form 10-K for fiscal 2021 - the 2018 court ruling, segment contribution for 2019-2021, top-twenty customer revenue and the government fiscal year. — FY2021 · publ. February 2022 · source ↗
  13. ReportedThe government segment produced $1,576.1 million of contribution in 2025 against $1,366.6 million from commercial customers.
    Palantir Technologies Form 10-K for fiscal 2025 - Item 7 MD&A and segment note: segment revenue and contribution, revenue by geography and customer concentration. — FY2025 · publ. 17 February 2026 · source ↗
Sources
Generated September 25, 2026