What they keep
Of every dollar of revenue, Palantir keeps 49 cents as profit — more than Microsoft does.
Net profit margin is the plainest number in a company's accounts: of every dollar that comes in the door, how much is still there at the end. Trailing twelve months, to 30 June 2026:
• Nvidia 63% — $159.6B of net income on $253.5B of revenue (its year ends in April, so its twelve months run two months behind the others here). • Alphabet 55% — $244.2B on $445.9B. • Palantir 49% — $3.02B on $6.16B. • Microsoft 40% — $133.7B on $331.8B.
Palantir is roughly a fiftieth of Microsoft's size by revenue and keeps a larger share of it. Two things get it there.
The first is ordinary for software: it costs almost nothing to run one more copy. Palantir's gross margin was 85% last quarter — $1.64B of gross profit on $1.94B of revenue.
The second is the tax line, and it is worth reading carefully. Last quarter Palantir earned $1.08B before tax and paid $15.4M of it — an effective rate of about 1.4%. Nothing improper is happening: Palantir lost money for most of its life, and those accumulated losses offset taxable income until they run out. It does mean the 49% is flattered by something that is temporary by construction. Its operating margin — before interest income and before tax — was 47%.
A margin is a description, not a verdict on the price of the stock.
Sources: company 10-Q and 10-K filings via SEC EDGAR; figures cross-checked against stockanalysis.com. Not financial advice.
