Palantir Technologies Inc. Class A Common Stock (PLTR)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	—	119,966	-356,969	-484,854	-1,164,890
Interest expense	US$ in thousands	—	3,470	4,058	3,640	14,139
Interest coverage		—	34.57	-87.97	-133.20	-82.39

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $—K
= —

The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates a stronger ability to meet interest obligations. Looking at Palantir Technologies Inc. Class A Common Stock's interest coverage over the years, we observe a concerning trend. In December 2020 and 2021, the company had negative interest coverage ratios of -82.39 and -133.20, respectively. This suggests that the company's operating income was insufficient to cover its interest expenses during those periods.

In December 2022, the interest coverage ratio slightly improved but remained negative at -87.97. This indicates that the company continued to struggle in meeting its interest obligations with its operating income. However, the situation changed significantly in December 2023, as the interest coverage ratio turned positive at 34.57. This improvement suggests that Palantir Technologies Inc. managed to generate sufficient operating income to cover its interest expenses during that period, reflecting a positive shift in its financial health.

Unfortunately, the data for December 2024 is missing, making it challenging to assess the company's most recent interest coverage performance. Overall, while there was a notable improvement in 2023, Palantir Technologies Inc. faced significant challenges in meeting its interest obligations in the earlier years, highlighting the importance of monitoring and managing financial leverage for sustainable operations.