Item 1. FINANCIAL STATEMENTS (UNAUDITED)

Palantir Technologies Inc.

Condensed Consolidated Balance Sheets

(in thousands, except per share amounts)

(unaudited)

			As of June 30, 2023						As of December 31, 2022
Assets
Current assets:
Cash and cash equivalents			$	1,055,923					$	2,598,540
Marketable securities			2,047,329						35,135
Accounts receivable, net			375,756						258,346
Prepaid expenses and other current assets			97,906						149,556
Total current assets			3,576,914						3,041,577
Property and equipment, net			54,097						69,170
Operating lease right-of-use assets			199,661						200,240
Other assets			149,592						150,252
Total assets			$	3,980,264					$	3,461,239
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable			$	4,613					$	44,788
Accrued liabilities			184,617						172,715
Deferred revenue			260,335						183,350
Customer deposits			183,964						141,989
Operating lease liabilities			51,855						45,099
Total current liabilities			685,384						587,941
Deferred revenue, noncurrent			50,408						9,965
Customer deposits, noncurrent			3,099						3,936
Operating lease liabilities, noncurrent			194,134						204,305
Other noncurrent liabilities			12,101						12,655
Total liabilities			945,126						818,802
Commitments and Contingencies (Note 7)
Stockholders’ equity:
Common stock, $0.001 par value: 20,000,000 Class A shares authorized as of June 30, 2023 and December 31, 2022; 2,045,404 and 1,995,414 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively; 2,700,000 Class B shares authorized as of June 30, 2023 and December 31, 2022; 103,571 and 102,656 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively; and 1,005 Class F shares authorized, issued, and outstanding as of June 30, 2023 and December 31, 2022			2,149						2,099
Additional paid-in capital			8,773,043						8,427,998
Accumulated other comprehensive loss, net			(5,209)						(5,333)
Accumulated deficit			(5,814,509)						(5,859,438)
Total stockholders’ equity			2,955,474						2,565,326
Noncontrolling interests			79,664						77,111
Total equity			3,035,138						2,642,437
Total liabilities and equity			$	3,980,264					$	3,461,239

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Palantir Technologies Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

			Three Months Ended June 30,												Six Months Ended June 30,
			2023						2022						2023						2022
Revenue			$	533,317					$	473,010					$	1,058,503					$	919,367
Cost of revenue			106,899						102,224						214,544						196,627
Gross profit			426,418						370,786						843,959						722,740
Operating expenses:
Sales and marketing			184,163						168,875						371,256						329,360
Research and development			99,533						88,171						189,633						176,772
General and administrative			132,648						155,485						268,881						297,792
Total operating expenses			416,344						412,531						829,770						803,924
Income (loss) from operations			10,074						(41,745)						14,189						(81,184)
Interest income			30,310						1,472						51,163						2,019
Interest expense			(1,317)						(670)						(2,592)						(1,264)
Other income (expense), net			(9,024)						(135,798)						(11,885)						(195,668)
Income (loss) before provision for income taxes			30,043						(176,741)						50,875						(276,097)
Provision for income taxes			2,171						2,588						3,852						4,611
Net income (loss)			27,872						(179,329)						47,023						(280,708)
Less: Net income (loss) attributable to noncontrolling interests			(255)						—						2,094						—
Net income (loss) attributable to common stockholders			$	28,127					$	(179,329)					$	44,929					$	(280,708)
Net earnings (loss) per share attributable to common stockholders, basic			$	0.01					$	(0.09)					$	0.02					$	(0.14)
Net earnings (loss) per share attributable to common stockholders, diluted			$	0.01					$	(0.09)					$	0.02					$	(0.14)
Weighted-average shares of common stock outstanding used in computing net earnings (loss) per share attributable to common stockholders, basic			2,131,224						2,054,799						2,119,567						2,045,604
Weighted-average shares of common stock outstanding used in computing net earnings (loss) per share attributable to common stockholders, diluted			2,278,155						2,054,799						2,252,205						2,045,604

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Palantir Technologies Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

(unaudited)

			Three Months Ended June 30,												Six Months Ended June 30,
			2023						2022						2023						2022
Net income (loss)			$	27,872					$	(179,329)					$	47,023					$	(280,708)
Other comprehensive income (loss)
Foreign currency translation adjustments			166						(2,630)						896						(4,325)
Net unrealized loss on available-for-sale securities			(1,057)						—						(772)						—
Comprehensive income (loss)			26,981						(181,959)						47,147						(285,033)
Less: Comprehensive income (loss) attributable to noncontrolling interests			(255)						—						2,094						—
Comprehensive income (loss) attributable to common stockholders			$	27,236					$	(181,959)					$	45,053					$	(285,033)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Palantir Technologies Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands)

(unaudited)

			Common Stock												Additional Paid-in Capital						Accumulated Other Comprehensive Loss, Net						Accumulated Deficit						Total Stockholders’ Equity						Noncontrolling Interests						Total Equity
			Shares						Amount
Balance as of March 31, 2023			2,117,730						$	2,117					$	8,568,570					$	(4,318)					$	(5,842,636)					$	2,723,733					$	79,460					$	2,803,193
Issuance of common stock from the exercise of stock options			19,062						19						90,330						—						—						90,349						—						90,349
Issuance of common stock upon vesting of restricted stock units (“RSUs”)			13,188						13						(13)						—						—						—						—						—
Stock-based compensation			—						—						114,156						—						—						114,156						—						114,156
Other comprehensive loss			—						—						—						(891)						—						(891)						—						(891)
Other, net			—						—						—						—						—						—						459						459
Net income			—						—						—						—						28,127						28,127						(255)						27,872
Balance as of June 30, 2023			2,149,980						$	2,149					$	8,773,043					$	(5,209)					$	(5,814,509)					$	2,955,474					$	79,664					$	3,035,138
			Common Stock												Additional Paid-in Capital						Accumulated Other Comprehensive Loss, Net						Accumulated Deficit						Total Stockholders’ Equity						Noncontrolling Interests						Total Equity
			Shares						Amount
Balance as of December 31, 2022			2,099,075						$	2,099					$	8,427,998					$	(5,333)					$	(5,859,438)					$	2,565,326					$	77,111					$	2,642,437
Issuance of common stock from the exercise of stock options			24,443						24						116,249						—						—						116,273						—						116,273
Issuance of common stock upon vesting of RSUs			26,462						26						(26)						—						—						—						—						—
Stock-based compensation			—						—						228,822						—						—						228,822						—						228,822
Other comprehensive income			—						—						—						124						—						124						—						124
Other, net			—						—						—						—						—						—						459						459
Net income			—						—						—						—						44,929						44,929						2,094						47,023
Balance as of June 30, 2023			2,149,980						$	2,149					$	8,773,043					$	(5,209)					$	(5,814,509)					$	2,955,474					$	79,664					$	3,035,138

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Palantir Technologies Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands)

(unaudited)

			Common Stock												Additional Paid-in Capital						Accumulated Other Comprehensive Loss						Accumulated Deficit						Total Stockholders’ Equity
			Shares						Amount
Balance as of March 31, 2022			2,045,876						$	2,046					$	7,953,856					$	(4,044)					$	(5,587,112)					$	2,364,746
Issuance of common stock from the exercise of stock options			4,780						5						20,311						—						—						20,316
Issuance of common stock upon vesting of RSUs			12,085						12						(12)						—						—						—
Stock-based compensation			—						—						145,721						—						—						145,721
Other comprehensive loss			—						—						—						(2,630)						—						(2,630)
Net loss			—						—						—						—						(179,329)						(179,329)
Balance as of June 30, 2022			2,062,741						$	2,063					$	8,119,876					$	(6,674)					$	(5,766,441)					$	2,348,824
			Common Stock												Additional Paid-in Capital						Accumulated Other Comprehensive Loss						Accumulated Deficit						Total Stockholders’ Equity
			Shares						Amount
Balance as of December 31, 2021			2,027,474						$	2,027					$	7,777,085					$	(2,349)					$	(5,485,733)					$	2,291,030
Issuance of common stock from the exercise of stock options			11,434						12						47,529						—						—						47,541
Issuance of common stock upon vesting of RSUs			23,833						24						(24)						—						—						—
Stock-based compensation			—						—						295,286						—						—						295,286
Other comprehensive loss			—						—						—						(4,325)						—						(4,325)
Net loss			—						—						—						—						(280,708)						(280,708)
Balance as of June 30, 2022			2,062,741						$	2,063					$	8,119,876					$	(6,674)					$	(5,766,441)					$	2,348,824

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Palantir Technologies Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

			Six Months Ended June 30,
2023						2022
Operating activities
Net income (loss)			$	47,023					$	(280,708)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			16,719						9,207
Stock-based compensation			228,915						295,092
Noncash operating lease expense			22,724						20,246
Unrealized and realized (gain) loss from marketable securities, net			11,078						201,341
Noncash consideration			(20,166)						(4,600)
Other operating activities			(17,817)						(623)
Changes in operating assets and liabilities:
Accounts receivable, net			(113,663)						(75,739)
Prepaid expenses and other current assets			1,091						(34,820)
Other assets			(3,485)						8,087
Accounts payable			(39,057)						(19,985)
Accrued liabilities			13,780						28,850
Deferred revenue, current and noncurrent			115,868						(11,681)
Customer deposits, current and noncurrent			40,144						(19,314)
Operating lease liabilities, current and noncurrent			(25,603)						(17,331)
Other noncurrent liabilities			17						(114)
Net cash provided by operating activities			277,568						97,908
Investing activities
Purchases of property and equipment			(8,689)						(20,673)
Purchases of marketable securities			(2,936,939)						(89,500)
Proceeds from sales and redemption of marketable securities			948,866						19,009
Proceeds from sales of alternative investments			51,072						—
Net cash used in investing activities			(1,945,690)						(91,164)
Financing activities
Proceeds from the exercise of common stock options			116,273						47,541
Other financing activities			394						307
Net cash provided by financing activities			116,667						47,848
Effect of foreign exchange on cash, cash equivalents, and restricted cash			(1,855)						(6,341)
Net decrease in cash, cash equivalents, and restricted cash			(1,553,310)						48,251
Cash, cash equivalents, and restricted cash - beginning of period			2,627,335						2,366,914
Cash, cash equivalents, and restricted cash - end of period			$	1,074,025					$	2,415,165

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1. Organization

Palantir Technologies Inc. (including its subsidiaries, “Palantir” or the “Company”) was incorporated in Delaware on May 6, 2003. The Company builds and deploys software platforms that serve as the central operating systems for its customers.

2. Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The accompanying condensed consolidated financial statements include the accounts of Palantir Technologies Inc. and its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Investments in entities where the Company holds at least a 20% ownership interest and has the ability to exercise significant influence over, but does not control, the investee are accounted for using the equity method of accounting. Certain prior year balances have been reclassified to conform to the current year presentation. Such reclassifications did not affect total revenues, income (loss) from operations, net income (loss), or cash flows. The Company's fiscal year ends on December 31.

The unaudited condensed consolidated balance sheet as of December 31, 2022 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including certain notes required by GAAP on an annual reporting basis. In management’s opinion, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the balance sheets and statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year or any future period.

These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes included in its Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 21, 2023.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods.

Significant estimates and assumptions made in the accompanying condensed consolidated financial statements include, but are not limited to, the identification of performance obligations in customer contracts; the valuation of deferred tax assets and uncertain tax positions; the collectability of contract consideration, including accounts receivable; the useful lives of intangible assets; and the valuation of assets acquired and liabilities assumed from business combinations, including intangible assets and goodwill. Estimates and judgments are based on historical experience, forecasted events, and various other assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could affect the Company’s financial position and results of operations.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are discussed in Note 2. Significant Accounting Policies in the notes to consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 21, 2023. There have been no significant changes to these policies during the six months ended June 30, 2023, except for the changes noted below.

Cash, Cash Equivalents, and Restricted Cash

The Company considers all highly liquid investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents primarily consist of amounts invested in money market funds and available-for-sale debt securities.

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Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Restricted cash primarily consists of cash and certificates of deposit that are held as collateral against letters of credit and guarantees that the Company is required to maintain for operating lease agreements, certain customer contracts, and other guarantees and financing arrangements.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the amounts shown in the condensed consolidated statements of cash flows (in thousands):

			As of June 30,
			2023						2022
Cash and cash equivalents			$	1,055,923					$	2,358,393
Restricted cash included in prepaid expenses and other current assets			5,999						28,125
Restricted cash included in other assets			12,103						28,647
Total cash, cash equivalents, and restricted cash			$	1,074,025					$	2,415,165

Accounts Receivable and Allowance for Credit Losses

Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses. The Company generally grants non-collateralized credit terms to its customers. Allowance for credit losses is based on the Company’s best estimate of probable losses inherent in its accounts receivable portfolio and is determined based on expectations of the customer’s ability to pay by considering factors such as customer type (commercial or government), historical experience, financial position of the customer, age of the accounts receivable, current economic conditions, including the COVID-19 pandemic, and reasonable and supportable forward-looking factors about its portfolio and future economic conditions. Accounts receivable are written-off and charged against an allowance for credit losses when the Company has exhausted collection efforts without success. Based upon the Company’s assessment as of June 30, 2023 and December 31, 2022, the Company recorded an allowance for credit losses of $9.6 million and $10.1 million, respectively.

Debt Securities

Debt securities are primarily comprised of U.S. treasury securities. The debt securities are classified as available-for-sale at the time of purchase and are reevaluated as of each balance sheet date. The Company considers the majority of its available-for-sale debt securities as available for use in current operations and may sell these securities at any time, and therefore classifies these securities as current assets in its condensed consolidated balance sheets. Debt securities included in marketable securities on the condensed consolidated balance sheets consist of U.S. treasury securities with original maturities of greater than three months at the time of purchase, and the remaining U.S. treasury securities are included in cash and cash equivalents. Interest income on debt securities is included in other income (expense), net on the condensed consolidated statements of operations.

The majority of the Company’s available-for-sale securities are recorded at fair value each reporting period using quoted prices of similar instruments and are classified within Level 2 of the fair value hierarchy. The Company evaluates investments with unrealized loss positions for other than temporary impairment by assessing if they are related to deterioration in credit risk and whether it expects to recover the entire amortized cost basis of the security, the Company’s intent to sell, and whether it is more likely than not that the Company will be required to sell the securities before the recovery of their cost basis. Credit-related impairment losses, not to exceed the amount that fair value is less than the amortized cost basis, are recognized in other income (expense), net in the condensed consolidated statements of operations. Unrealized gains and non-credit related losses are reported as a separate component of accumulated other comprehensive loss, net in the condensed consolidated balance sheets until realized. Realized gains and losses and declines in value judged to be other than temporary are determined based on the specific identification method and are reported in other income (expense), net in the condensed consolidated statements of operations.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, accounts receivable, and marketable securities. Cash equivalents primarily consist of money market funds and U.S. treasury securities with original maturities of three months or less, which are invested primarily with U.S. financial institutions. Cash deposits with financial institutions, including restricted cash, generally exceed federally insured limits. Management believes minimal credit risk exists with respect to these financial institutions and the Company has not experienced any losses on such amounts.

The Company is exposed to concentrations of credit risk with respect to accounts receivable presented on the condensed consolidated balance sheets. The Company’s accounts receivable balances as of June 30, 2023 and December 31, 2022 were

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Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

$375.8 million and $258.3 million, respectively. Customer I represented 19% of total accounts receivable as of June 30, 2023 and no other customer represented more than 10% of total accounts receivable as of June 30, 2023. No customer represented more than 10% of total accounts receivable as of December 31, 2022.

For the three and six months ended June 30, 2023, Customer K, which is in the government operating segment, represented 10% of total revenue. No other customer represented more than 10% of total revenue for the three and six months ended June 30, 2023. For the three and six months ended June 30, 2022, no customer represented more than 10% of total revenue.

3. Contract Liabilities and Remaining Performance Obligations

Contract Liabilities

The Company’s contract liabilities consist of deferred revenue and customer deposits. As of June 30, 2023 and December 31, 2022, the Company's contract liability balances were $497.8 million and $339.2 million, respectively. Revenue of $270.2 million and $299.2 million was recognized during the six months ended June 30, 2023 and 2022, respectively, that was included in the contract liability balances as of December 31, 2022 and 2021, respectively.

Remaining Performance Obligations

The Company’s arrangements with its customers often have terms that span over multiple years. However, the Company allows many of its customers to terminate contracts for convenience prior to the end of the stated term with less than twelve months’ notice. Revenue allocated to remaining performance obligations represents noncancelable contracted revenue that has not yet been recognized, which includes deferred revenue and, in certain instances, amounts that will be invoiced. The Company has elected the practical expedient allowing the Company to not disclose remaining performance obligations for contracts with original terms of twelve months or less. Cancelable contracted revenue, which includes customer deposits, is not considered a remaining performance obligation.

The Company’s remaining performance obligations were $967.6 million as of June 30, 2023, of which the Company expects to recognize approximately 58% as revenue over the next 12 months, 36% as revenue over the subsequent 13 to 36 months, and the remainder thereafter.

Disaggregation of Revenue

See Note 12. Segment and Geographic Information for disaggregated revenue by customer segment and geographic region.

4. Investments and Fair Value Measurements

The following tables present the Company’s assets that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation (in thousands):

			As of June 30, 2023
			Total						Level 1						Level 2						Level 3
Assets:
Cash and cash equivalents:
Money market funds			$	625,336					$	625,336					$	—					$	—
Certificates of deposit			938						—						938						—
Prepaid expenses and other current assets and other assets:
Certificates of deposit			10,378						—						10,378						—
Marketable securities:
U.S. treasury securities			2,030,815						—						2,030,815						—
Publicly-traded equity securities			16,514						16,514						—						—
Total			$	2,683,981					$	641,850					$	2,042,131					$	—

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Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

			As of December 31, 2022
			Total						Level 1						Level 2						Level 3
Assets:
Cash and cash equivalents:
Money market funds			$	1,149,302					$	1,149,302					$	—					$	—
Certificates of deposit			6,791						—						6,791						—
Prepaid expenses and other current assets and other assets:
Certificates of deposit			18,707						—						18,707						—
Marketable securities:
Publicly-traded equity securities			35,135						35,135						—						—
Total			$	1,209,935					$	1,184,437					$	25,498					$	—

Certificates of Deposit

The Company’s certificates of deposit are Level 2 instruments. The fair value of such instruments is estimated based on valuations obtained from third-party pricing services that utilize industry standard valuation models, including both income-based and market-based approaches, for which all significant inputs are observable either directly or indirectly. These inputs include interest rate curves, foreign exchange rates, and credit ratings.

Debt Securities

As of June 30, 2023, debt securities consisted of the following (in thousands):

			As of June 30, 2023
			Amortized Cost						Unrealized Gains						Unrealized Losses						Fair Value
U.S. treasury securities included in marketable securities			$	2,031,587					$	145					$	(917)					$	2,030,815
Total debt securities			$	2,031,587					$	145					$	(917)					$	2,030,815

The Company did not sell any debt securities during the three months ended June 30, 2023. The Company sold $694.6 million of debt securities during the six months ended June 30, 2023 and immediately reinvested such proceeds into additional debt securities. The realized gains and losses from those sales were immaterial. No credit or non-credit losses related to debt securities were recorded as of June 30, 2023. As of June 30, 2023, available-for-sale debt securities of $1.1 billion were in an unrealized loss position primarily due to unfavorable changes in interest rates subsequent to initial purchase. None of the available-for-sale debt securities held as of June 30, 2023 were in a continuous unrealized loss position for greater than 12 months. The decline in fair value below amortized cost basis was not considered other than temporary as it is more likely than not that the Company will hold the securities until maturity or a recovery of the cost basis, and no credit-related impairment losses were recorded as of June 30, 2023. All of the Company’s U.S. treasury securities had contractual maturities due within one year.

As of December 31, 2022, the Company held an immaterial amount of debt securities.

Equity Securities

Equity securities primarily consist of shares held in publicly-traded companies, which are recorded at fair market value each reporting period in marketable securities on the condensed consolidated balance sheets. Additionally, we have accepted, and may continue to accept, securities as noncash consideration. Realized and unrealized gains and losses are recorded in other income (expense), net on the condensed consolidated statements of operations. During the three and six months ended June 30, 2022, the Company recorded net unrealized losses of $122.8 million and $174.7 million, respectively, and realized losses of $15.7 million and $26.6 million, respectively, within other income (expense), net on the condensed consolidated statements of operations. For the three months ended June 30, 2023 and 2022, net unrealized losses from publicly-traded equity securities held at the end of each period were $0.6 million and $134.4 million, respectively. For the six months ended June 30, 2023 and 2022, net unrealized losses from publicly-traded equity securities held at the end of each period were $7.0 million and $189.5 million, respectively.

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Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Investments

From 2021 through 2022, the Company approved and entered into certain agreements (“Investment Agreements”) to purchase shares of various entities, including special purpose acquisition companies and/or other privately-held or publicly-traded entities (each, an “Investee,” and such purchases, the “Investments”). During the year ended December 31, 2022, the Company purchased shares for a total investment of $124.5 million. No Investments were purchased under such Investment Agreements during the six months ended June 30, 2023.

In connection with signing the Investment Agreements, each Investee or an associated entity and the Company entered into a commercial contract for access to the Company’s products and services (collectively, the “Strategic Commercial Contracts”). The terms of such contracts, including contractual options, range from two to seven years and are subject to termination for cause provisions.

The Company assesses the concurrent agreements under the noncash consideration paid or payable to a customer guidance within Accounting Standards Codification 606, Revenue from Contracts with Customers, as well as the commercial substance of each arrangement considering the customer’s ability and intention to pay as well as the Company’s obligation to perform under each contract. As currently assessed, the total value of such Strategic Commercial Contracts with Investees or associated entities was $395.4 million as of June 30, 2023, which is inclusive of $43.7 million of contractual options. The Company performs ongoing assessments of customers’ financial condition, including the consideration of such customers’ ability and intention to pay, and whether all or some portion of the value of such contracts continue to meet the criteria for revenue recognition, among other factors. As of June 30, 2023, the cumulative amount of revenue recognized from Strategic Commercial Contracts was $219.4 million, of which $19.4 million and $52.8 million of revenue was recognized during the three and six months ended June 30, 2023, respectively.

Alternative Investments

During the year ended December 31, 2021, the Company purchased $50.9 million in 100-ounce gold bars. During the six months ended June 30, 2023, the Company sold all of its gold bars for total proceeds of $51.1 million and recorded an immaterial realized gain within other income (expense), net on the condensed consolidated statements of operations.

5. Balance Sheet Components

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

			As of June 30, 2023						As of December 31, 2022
Leasehold improvements			$	83,074					$	80,378
Computer equipment, software, and other			46,713						52,688
Furniture and fixtures			13,823						13,010
Construction in progress			918						5,506
Total property and equipment, gross			144,528						151,582
Less: accumulated depreciation and amortization			(90,431)						(82,412)
Total property and equipment, net			$	54,097					$	69,170

Depreciation and amortization expense related to property and equipment, net was $6.0 million and $4.5 million for the three months ended June 30, 2023 and 2022, respectively, and $11.9 million and $8.4 million for the six months ended June 30, 2023 and 2022, respectively.

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Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

			As of June 30, 2023						As of December 31, 2022
Accrued payroll and related expenses			$	68,052					$	43,495
Accrued taxes			39,257						41,326
Accrued other liabilities			77,308						87,894
Total accrued liabilities			$	184,617					$	172,715

6. Debt

2014 Credit Facility

In October 2014, the Company entered into an unsecured revolving credit facility, which has been subsequently secured by substantially all of the Company’s assets and amended from time to time (as amended, the “2014 Credit Facility”). As of June 30, 2023, the 2014 Credit Facility allowed for the drawdown of up to $950.0 million to fund working capital and general corporate expenditures, which includes total revolving commitments of $500.0 million and a delayed draw term loan (“DDTL”) commitment of $450.0 million, each with a maturity date of March 31, 2027. The DDTL commitment was available to draw upon through July 1, 2023, on which date it expired undrawn.

Outstanding balances under the 2014 Credit Facility would incur interest at the Secured Overnight Financing Rate (“SOFR”) as administered by the Federal Reserve Bank of New York, or a successor administrator of the SOFR (or the applicable benchmark replacement), plus 2.00% or a base rate plus 1.00%, subject to certain adjustments. The Company incurs a commitment fee of 0.30% assessed on the daily average undrawn portion of revolving and DDTL commitments. Applicable interest and commitment fees are payable quarterly or more or less frequently in certain circumstances. The 2014 Credit Facility also allows for an incremental loan facility of additional term loans or revolving loans in an aggregate principal amount up to the amount and upon the terms and conditions set forth therein with one or more existing or new lenders upon mutual agreement between the Company and such lenders.

As of June 30, 2023, the Company had no outstanding debt balances and an aggregate of $950.0 million undrawn of revolving and DDTL commitments under the 2014 Credit Facility.

The 2014 Credit Facility contains customary representations and warranties, and certain financial and nonfinancial covenants, including but not limited to maintaining minimum liquidity of $50.0 million, and certain limitations on liens and indebtedness. The Company was in compliance with all covenants associated with the 2014 Credit Facility as of June 30, 2023.

7. Commitments and Contingencies

Purchase Commitments

In December 2019, the Company entered into, and subsequently amended, a minimum annual commitment to purchase cloud hosting services of at least $1.49 billion over six contract years, with an optional carryover period through September 30, 2029, in exchange for various discounts on such services. If the spend does not meet the minimum annual commitment each year or at the end of the term, the Company is obligated to make a return payment. If the difference is greater than $30.0 million for each of the first three contract years or $50.0 million for each of the contract years thereafter (“relief amounts”), the Company has the option to pay the respective relief amount for that year for services to be utilized in the future and the excess amount of the difference above the relief amount would be added to the minimum annual commitment of the following year through the end of the contract. As of June 30, 2023, the Company satisfied $124.2 million of its $199.0 million commitment for contract year three ending September 30, 2023.

Litigation and Legal Proceedings

From time to time, third parties may assert patent infringement claims against the Company. In addition, from time to time, the Company may be subject to other legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of trademarks, copyrights, and other intellectual property rights; employment claims; securities claims; investor claims; corporate claims; class action claims; and general contract, tort, or other claims. The Company may from time to time also be subject to various legal or government claims, disputes, or investigations. Such matters may include, but not be limited to, claims, disputes, allegations, or investigations related to warranty; refund; breach of contract; breach, leak, or misuse of personal data or confidential information; employment; government procurement; intellectual property; government regulation

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Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

or compliance (including but not limited to anti-corruption requirements, export or other trade controls, data privacy or data protection, cybersecurity requirements, or antitrust/competition law requirements); securities; investor; corporate; or other matters. The Company establishes an accrual for loss contingencies when the loss is both probable and reasonably estimable.

On September 15, 2022, October 25, 2022, and November 4, 2022, putative securities class action complaints were filed in the United States District Court for the District of Colorado, captioned Cupat v. Palantir Technologies Inc., et al., Case No. 1:22-cv-02384, Allegheny County Employees’ Retirement System v. Palantir Technologies, Inc., et al., Case No. 1:22-cv-02805, and Shijun Liu, Individually and as Trustee of the Liu Family Trust 2019 v. Palantir Technologies Inc., et al., Case No. 1:22-cv-02893, respectively, naming the Company and certain current and former officers and directors as defendants. The suits allege false and misleading statements about our business and prospects, and purport to allege claims under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Securities Act of 1933, as amended (the “Securities Act”), and seek unspecified damages and remedies under Sections 10(b), 20(a), and 20(A) of the Exchange Act and Sections 11 and 15 of the Securities Act. These three actions subsequently were consolidated as Cupat v. Palantir Technologies Inc., et al., Lead Civil Action No. 1:22-cv-02834-CNS-SKC, consolidated with civil actions 1:22-cv-02805-CNS-SKC and 1:22-cv-02893-CNS-SKC. On November 21, 2022 and January 13, 2023, stockholder derivative actions were filed in the United States District Court for the District of Colorado, captioned Li v. Karp, et al., Case No. 22-cv-3028 and Parmenter v. Karp, et al., Case No. 23-cv-118, and on January 27, 2023, a stockholder derivative action was filed in the United States District Court for the District of Delaware captioned Miao v. Karp, et al., Case No. 1:23-cv-00103-MN, each against certain current and former officers and directors asserting breach of fiduciary duty and related claims relating to the allegations of the securities class action complaints and seek unspecified damages and injunctive remedies under Section 14(a) of the Exchange Act and Delaware law. Because the litigation is in early stages, the Company is unable to estimate the reasonably possible loss or range of loss, if any, that may result from these matters.

As of June 30, 2023, the Company was not aware of any currently pending legal matters or claims, individually or in the aggregate, that were expected to have a material adverse impact on its condensed consolidated financial statements.

Letters of Credit and Guarantees

The Company had irrevocable standby letters of credit and guarantees, including bank guarantees, outstanding in the amounts of $18.1 million and $28.8 million as of June 30, 2023 and December 31, 2022, respectively, which were fully collateralized. The Company is required to maintain these letters of credit and guarantees primarily in connection with operating lease agreements, certain customer contracts, and other guarantees and financing arrangements. As of June 30, 2023, these letters of credit and guarantees had expiration dates through August 2031.

Warranties and Indemnification

The Company generally provides a warranty for its software products and services and a service level agreement (“SLA”) for the Company’s performance of software operations. The Company’s products are generally warranted to perform substantially as described in the associated product documentation during the subscription term or for a period of up to 90 days where the software is hosted by the customer, and the Company includes operations and maintenance (“O&M”) services as part of its subscription and license agreements to support this warranty and maintain the operability of the software. The Company’s services are generally warranted to be performed in a professional manner and by an adequate staff with knowledge about the products. In the event there is a failure of such warranties, the Company generally is obligated to correct the product or service to conform to the warranty provision or, if the Company is unable to do so, the customer is entitled to seek a refund of the purchase price of the product and service (generally prorated over the contract term). Due to the absence of historical warranty claims, the Company’s expectations of future claims related to products under warranty continue to be insignificant. The Company has not recorded warranty expense or related accruals as of June 30, 2023 and December 31, 2022.

The Company generally agrees to indemnify its customers against legal claims that the Company’s software products infringe certain third-party intellectual property rights and accounts for its indemnification obligations. In the event of such a claim, the Company is generally obligated to defend its customer against the claim and to either settle the claim at the Company’s expense or pay damages that the customer is legally required to pay to the third-party claimant. In addition, in the event of an infringement, the Company generally agrees to secure the right for the customer to continue using the infringing product; to modify or replace the infringing product; or, if those options are not commercially practicable, to refund the cost of the software, as prorated over the period. To date, the Company has not been required to make any payment resulting from infringement claims asserted against its customers and does not believe that the Company will be liable for such claims in the foreseeable future. As such, the Company has not recorded a liability for infringement costs as of June 30, 2023 and December 31, 2022.

The Company has obligations under certain circumstances to indemnify each of the defendant directors and certain officers against judgments, fines, settlements, and expenses related to claims against such directors and certain officers and otherwise to

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Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

the fullest extent permitted under the law and the Company’s Amended and Restated Bylaws and Amended and Restated Certificate of Incorporation.

8. Stockholders' Equity

The Company’s Class A, Class B, and Class F common stock (collectively, the “common stock”) all have the same rights, except with respect to voting and conversion rights. Class A and Class B common stock have voting rights of 1 and 10 votes per share, respectively. The Class F common stock has the voting rights generally described herein and each share of Class F common stock is convertible at any time, at the option of the holder thereof, into one share of Class B common stock. All shares of Class F common stock are held in a voting trust established by Stephen Cohen, Alexander Karp, and Peter Thiel (the “Founders”). The Class F common stock generally gives the Founders the ability to control up to 49.999999% of the total voting power of the Company's capital stock, so long as the Founders and certain of their affiliates collectively meet a minimum ownership threshold, which was 100.0 million of the Company's equity securities as of June 30, 2023.

Holders of the common stock are entitled to dividends when, as, and if declared by the Company’s Board of Directors, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends. No dividends have been declared as of June 30, 2023.

The following represented the total authorized, issued, and outstanding shares for each class of common stock (in thousands):

			As of June 30, 2023												As of December 31, 2022
			Authorized						Issued and Outstanding						Authorized						Issued and Outstanding
Class A Common Stock			20,000,000						2,045,404						20,000,000						1,995,414
Class B Common Stock			2,700,000						103,571						2,700,000						102,656
Class F Common Stock			1,005						1,005						1,005						1,005
Total			22,701,005						2,149,980						22,701,005						2,099,075

9. Stock-Based Compensation

Stock Options

The following table summarizes stock option activity for the six months ended June 30, 2023 (in thousands, except per share amounts):

			Options Outstanding						Weighted-Average Exercise Price Per Share						Weighted-Average Remaining Contractual Life (years)						Aggregate Intrinsic Value
Balance as of December 31, 2022			326,913						$	8.05					8.33						$	272,603
Options exercised			(24,443)						4.76
Options canceled and forfeited			(1,336)						4.99
Balance as of June 30, 2023			301,134						$	8.33					8.01						$	2,108,191
Options vested and exercisable as of June 30, 2023			172,000						$	6.18					7.21						$	1,573,350

As of June 30, 2023, the total unrecognized stock-based compensation expense related to options outstanding was $654.8 million, which is expected to be recognized over a weighted-average service period of seven years.

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Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

RSUs

The following table summarizes the RSU activity for the six months ended June 30, 2023 (in thousands, except per share amounts):

			RSUs Outstanding						Weighted Average Grant Date Fair Value per Share
RSUs unvested and outstanding as of December 31, 2022			126,426						$	10.07
RSUs granted			11,634						7.75
RSUs vested and converted to shares			(26,462)						9.57
RSUs canceled			(5,491)						10.66
RSUs unvested and outstanding as of June 30, 2023			106,107						$	9.85

As of June 30, 2023, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $624.7 million, which the Company expects to recognize over a weighted-average service period of three years.

Stock-based Compensation Expense

Total stock-based compensation expense was as follows (in thousands):

			Three Months Ended June 30,												Six Months Ended June 30,
			2023						2022						2023						2022
Cost of revenue			$	8,004					$	11,211					$	17,181					$	22,888
Sales and marketing			38,131						49,405						77,666						98,677
Research and development			23,192						24,978						43,116						51,883
General and administrative			44,874						60,175						90,952						121,644
Total stock-based compensation expense			$	114,201					$	145,769					$	228,915					$	295,092

10. Income Taxes

The Company recorded a provision for income taxes of $2.2 million and $2.6 million for the three months ended June 30, 2023 and 2022, respectively, and a provision for income taxes of $3.9 million and $4.6 million for the six months ended June 30, 2023 and 2022, respectively. The Company is subject to income tax in the U.S. as well as other tax jurisdictions in which it conducts business. The Company’s effective tax rate as of June 30, 2023 differs from the U.S. statutory rate primarily due to foreign income taxed at different rates, non-deductible stock-based compensation, other non-deductible expenses, and valuation allowances recorded on its deferred tax assets from the U.S., United Kingdom (“U.K.”), and other jurisdictions. There was no material change in the provision for income taxes for the three and six months ended June 30, 2023 compared to the same periods in 2022.

The realization of deferred tax assets is dependent upon the generation of sufficient taxable income of the appropriate character in future periods. The Company assesses its ability to realize the deferred tax assets on a quarterly basis, and it establishes a valuation allowance if it is more likely than not that some portion of the deferred tax assets will not be realized. The Company weighs all available positive and negative evidence, including its earnings history and results of recent operations, scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies. For example, due to the weight of objectively verifiable negative evidence, including its history of U.S. and U.K. net operating tax losses, the Company believes that it is more likely than not that its U.S. and U.K. deferred tax assets will not be fully realized. Accordingly, the Company has maintained a full valuation allowance on its U.S. and U.K. deferred tax assets as of June 30, 2023.

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Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

11. Net Earnings (Loss) Per Share Attributable to Common Stockholders

The following table presents the calculation of basic and diluted net earnings (loss) per share attributable to common stockholders (in thousands, except per share amounts):

			Three Months Ended June 30,												Six Months Ended June 30,
			2023						2022						2023						2022
Numerator
Net income (loss) attributable to common stockholders for diluted net earnings (loss) per share			$	28,127					$	(179,329)					$	44,929					$	(280,708)
Denominator
Weighted-average shares used in computing net earnings (loss) per share:
Basic			2,131,224						2,054,799						2,119,567						2,045,604
Effect of dilutive shares			146,931						—						132,638						—
Diluted			2,278,155						2,054,799						2,252,205						2,045,604
Net earnings (loss) per share
Net earnings (loss) per share attributable to common stockholders:
Basic			$	0.01					$	(0.09)					$	0.02					$	(0.14)
Diluted			$	0.01					$	(0.09)					$	0.02					$	(0.14)

The following outstanding potentially dilutive common stock equivalents have been excluded from the computation of diluted net earnings (loss) per share attributable to common stockholders for the periods presented due to their anti-dilutive effect (in thousands):

			Three Months Ended June 30,												Six Months Ended June 30,
			2023						2022						2023						2022
Options issued and outstanding			162,000						336,576						162,000						336,576
RSUs outstanding			11,840						134,761						16,535						134,761
Warrants to purchase common stock			13,042						13,042						13,042						13,042
Total			186,882						484,379						191,577						484,379

12. Segment and Geographic Information

The following reporting segment tables reflect the results of the Company’s reportable operating segments consistent with the manner in which the chief operating decision maker (“CODM”) evaluates the performance of each segment and allocates the Company’s resources. The CODM does not evaluate the performance of the Company’s assets on a segment basis for internal management reporting and, therefore, such information is not presented.

Contribution is used, in part, to evaluate the performance of, and allocate resources to, each of the segments. A segment’s contribution is calculated as segment revenue less the related costs of revenue and sales and marketing expenses. It excludes certain operating expenses that are not allocated to segments because they are separately managed at the consolidated corporate level. These unallocated costs include stock-based compensation expense, research and development expenses, and general and administrative expenses.

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Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Financial information for each reportable segment was as follows (in thousands):

			Three Months Ended June 30,												Six Months Ended June 30,
			2023						2022						2023						2022
Revenue:
Government			$	301,505					$	262,998					$	590,575					$	504,788
Commercial			231,812						210,012						467,928						414,579
Total revenue			$	533,317					$	473,010					$	1,058,503					$	919,367

			Three Months Ended June 30,												Six Months Ended June 30,
			2023						2022						2023						2022
Contribution:
Government			$	174,230					$	153,642					$	340,463					$	293,452
Commercial			114,160						108,885						227,087						221,493
Total contribution			$	288,390					$	262,527					$	567,550					$	514,945

The reconciliation of contribution to income (loss) from operations is as follows (in thousands):

			Three Months Ended June 30,												Six Months Ended June 30,
			2023						2022						2023						2022
Income (loss) from operations			$	10,074					$	(41,745)					$	14,189					$	(81,184)
Research and development expenses (1)			76,341						63,193						146,517						124,889
General and administrative expenses (1)			87,774						95,310						177,929						176,148
Total stock-based compensation expense			114,201						145,769						228,915						295,092
Total contribution			$	288,390					$	262,527					$	567,550					$	514,945

—————

(1) Excludes stock-based compensation expense.

Geographic Information

Revenue by geography is based on the customer’s headquarters or agency location at the time of sale. Revenue is as follows (in thousands, except percentages):

			Three Months Ended June 30,																								Six Months Ended June 30,
			2023												2022												2023												2022
			Amount						%						Amount						%						Amount						%						Amount						%
Revenue:
United States			$	328,012					62		%				$	290,223					61		%				$	664,857					63		%				$	563,136					61		%
United Kingdom			63,229						12		%				52,140						11		%				112,808						11		%				102,042						11		%
Rest of world (1)			142,076						26		%				130,647						28		%				280,838						26		%				254,189						28		%
Total revenue			$	533,317					100		%				$	473,010					100		%				$	1,058,503					100		%				$	919,367					100		%

—————

(1) No other country represents 10% or more of total revenue for the three and six months ended June 30, 2023 or 2022.

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Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

13. Intangible Assets

Intangible assets subject to amortization that are not fully amortized are as follows (in thousands):

			Weighted average useful life						As of June 30, 2023																		As of December 31, 2022
						Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount						Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount
Customer relationships			4.33						$	10,400					$	(1,387)					$	9,013					$	10,400					$	(347)					$	10,053
Reacquired rights			6.33						17,618						(1,678)						15,941						17,619						(420)						17,199
Backlog			1.33						6,700						(2,233)						4,467						6,700						(558)						6,142
Other			0.77						4,225						(2,924)						1,300						5,717						(3,572)						2,145
Total intangible assets									$	38,943					$	(8,222)					$	30,721					$	40,436					$	(4,897)					$	35,539

Amortization expense of intangible assets was not material for the three and six months ended June 30, 2023 or 2022.

As of June 30, 2023, expected amortization expense for the unamortized finite-lived intangible assets is as follows (in thousands):

Year ended December 31,			Amount
Remainder of 2023			$	4,819
2024			7,844
2025			4,597
2026			4,597
2027			4,250
Thereafter			4,614
Total			$	30,721

14. Subsequent Events

In August 2023, our Board of Directors authorized a stock repurchase program of up to $1.0 billion of our outstanding shares of Class A common stock (the “Share Repurchase Program”). We may repurchase shares of Class A common stock from time to time through open market purchases, in privately negotiated transactions or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The timing and the amount of stock repurchases in the Share Repurchase Program will be determined by Palantir’s management, based on its evaluation of factors including business and market conditions, corporate and regulatory requirements, and other considerations.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “can,” “would,” “intend,” “target,” “goal,” “outlook,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “future,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

• our expectations regarding financial performance and liquidity, including but not limited to our expectations regarding revenue, cost of revenue, operating expenses, stock-based compensation, our ability to achieve and maintain future profitability, and cash flows;

• our ability to successfully execute our business and growth strategy;

• the sufficiency of our cash and cash equivalents to meet our liquidity needs;

• the demand for our platforms in general;

• our ability to increase our number of customers and revenue generated from customers;

• our expectations regarding the future contribution margin of our existing and future customers;

• our expectations regarding our ability to quickly and effectively integrate our platforms for our existing and future customers;

• our ability to develop new platforms, and enhancements to existing platforms, and bring them to market in a timely manner;

• our market share, category positions, and market trends, including our ability to grow our business in large government and commercial organizations, including our expectations regarding the impact of Federal Acquisition Streamlining Act of 1994 (“FASA”);

• our ability to compete with existing and new competitors in existing and new markets and products;

• our expectations regarding anticipated technology needs and developments and our ability to address those needs and developments with our platforms;

• our expectations regarding litigation and legal and regulatory matters;

• our expectations regarding our ability to meet existing performance obligations and maintain the operability of our products;

• our expectations regarding the effects of existing and developing laws and regulations, including with respect to taxation, privacy, data protection, cybersecurity, and artificial intelligence (“AI”);

• our expectations regarding new and evolving markets, such as AI;

• our ability to develop and protect our brand;

• our ability to maintain the security and availability of our platforms;

• our expectations and management of future growth;

• our expectations concerning relationships with third parties, including our customers, equity method investment partners, and vendors;

• our expectations regarding our investments in, and enterprise agreements with, various entities, including special purpose acquisition companies and/or other privately-held or publicly-traded entities;

• our ability to maintain, protect, and enhance our intellectual property;

• our expectations regarding the amount, timing and manner of any stock repurchases;

• our expectations regarding our multi-class stock and governance structure and the benefits thereof;

• our expectations regarding macroeconomic conditions, including rising inflation and interest rates, monetary policy changes, or financial services sector instability;

• the impacts of the coronavirus (“COVID-19”) pandemic and the ongoing Russia-Ukraine conflict, including on our and our customers’, vendors’, and partners’ respective businesses and the markets in which we and our customers, vendors, and partners operate;

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• the impacts of the volatility and fluctuations in currency exchange rates, including an increase in the strength of the United States (“U.S.”) dollar, on the costs of our products outside of the United States and on customer demand; and

• the increased expenses associated with being a public company.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on any forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in such forward-looking statements.

Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, restructurings, joint ventures, partnerships, channel sales relationships, or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

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