Check out these two charts. This is a tomahawk dunk, a killshot.

Palantir accounts receivable grew 20x while revenue growth grew 6x. DSO rose form 20 to 67 days. Q4 though is the seasonal low, and seasonal lows have been rising - 20 → 44 → 40 → 46 → 55 → 63 → 67 days. Today’s “best” quarter (67 days) is worse than the peak quarters of 2020–2021. The floor keeps rising. Government customers pay slower, but mix is far more commercial now. Larger deals are longer cycles, but Adobe does big deals and its DSO has fallen from 50 to 29. Scaling rapidly with new customers, but HubSpot is one of the fastest growing, and its DSO has been flat at 36-40 days the entire time. 

This also could mean increasingly aggressive revenue recognition, extended payment terms as a sales tactic/concession, contracts with back-end loaded cash - again a concession, and finally a customer just paying slower because the ROI//business use case is not strong enough to justify shorter or shortening payment terms. One would think if the customer is so enthusiastic, they would pay on time, or faster.  This is not happening. 

Rising DSO on an absolute and comparative basis to SaaS companies suggest the company is much more consultancy that Software/SaaS. 

Note that Palantir's DSO is very close to Accenture on an absolute basis - 76 days at Accenture vs maybe 76 at Palantir this current quarter on the seasonal bump. But Palantir trends like Accenture, and unlike the SaaS/Software firms. Palantir trades at 70x sales because it has sold Wall Street that it is SaaS, not the single digit multiple of a consultant.

Read more at the full post - Palantir’s New Clothes: Foundry, AIP, and the Failure of Reason