The secretive big data and surveillance company Palantir Technologies offered its stock to public investors for the first time Wednesday, a long-anticipated move that will bring public scrutiny to one of tech’s most secretive start-ups.

The direct listing on the New York Stock Exchange was one of the most hotly anticipated tech IPOs in years, giving investors the chance to capitalize on a business that has grown by almost a third each year since 2009. Palantir stock started trading at $10 per share Wednesday ― higher than its earlier reference price of $7.25 per share ― and trailed off slightly in the afternoon, closing at $9.50 per share.

Of greater significance is the way in which the public offering will lift the veil of secrecy around the company’s technology and finances. The first financial filings shared with investors ahead of the offering revealed Palantir’s business is concentrated among a handful of loyal customers, raising questions about whether it can scale up the same way as other tech outfits.

The records show that Palantir has just 125 corporate and government customers, a relatively small number for a large, publicly-traded tech company. Two-thirds of its revenue comes from its top 20 customers, raising concerns that it could lose business as long-running government contracts are renegotiated. It generated an average revenue per customer of $24.8 million last year.

To some, the surprising concentration of Palantir’s customer base shows the limits of its business. Palantir’s reliance on that insular market could make it a risky bet for many investors, said Rohit Kulkarni, a senior analyst at MKM Partners in San Francisco.

“The company is still almost at the mercy of a small number of government contracts,” Kulkarni said. “If and when they come up for renewal, the investment community will get extremely spooked about how those negotiations go.”

Others see it as a sign that Palantir still has room to grow. Palantir chief operating officer Shyam Sankar said the company is just beginning to build out a modern sales operation and hired its first formal salesperson last year.

“It shows you how much headroom we have in front of us ... we have six customers in the Fortune 100 and 94 more to go," Sankar said. “We have a way of building deep, meaningful relationships … its what you expect if you aspire to be the central operating system of an institution."

Named for a mysterious black orb that a dark wizard uses to communicate with a giant disembodied flaming eye in J.R.R. Tolkien’s “The Lord of the Rings” trilogy, Palantir has long been one of Silicon Valley’s most closely held secrets. It was founded in 2004 by billionaire tech investor Peter Thiel with financial help from the CIA and has stayed private far longer than many observers thought it would.

While government contracts make up more than half of its revenue, it has attempted to recent years to build new lines of business serving corporate customers. Today, its algorithms, sporting names such as “Gotham” and “Foundry,” are applied to problems as high-stakes as spotting terrorists and as mundane as analyzing payroll.

Some of Palantir’s contracts with the U.S. government have been a lightning rod for human-rights activists and its own employees. It has a lucrative partnership with Immigration and Customs Enforcement, providing digital profiling tools to the federal agency as it carried out President Trump’s policies for apprehending and deporting undocumented immigrants. The company acknowledged in its filing with securities regulators that some of its contracts have made it a target for protests, but did not detail any of its work with ICE.

Palantir has also nosed its way into the Defense Department’s information technology industry, capitalizing on efforts to modernize the department’s technology to compete with foreign nations such as Russia and China. In an $800 million coup for its military business, Palantir in 2019 beat out Raytheon to become the primary provider for the Army’s battlefield intelligence system.

That sort of work is expected to take on a higher profile in the future as the U.S. military seeks to rely more heavily on artificial-intelligence algorithms and unmanned weapons systems.

Palantir doubtlessly has more room to grow as it seeks to expand its military work. It recently tacked on a $110 million contract to manage an Army personnel system, and won in March an $80 million contract for a complex Navy logistics system. And on Tuesday it was awarded yet another Army contract, this one a $91 million opportunity to research new ways that artificial intelligence algorithms can be integrated into how military agencies make decisions.

Still, there is a concern that the company’s long-term market could be limited.

Palantir’s typical corporate customer is a large, multinational company with huge amounts of data. While Palantir has emphasized its opportunity to expand within these companies — aiming to become “a central operating system” for their data — it will eventually run out of giant global companies to sell to.

Brendan Burke, an analyst at venture capital industry research firm PitchBook, said he thinks investors have valued Palantir as if it were an enterprise software company. But its financials suggest it is primarily in the government contracting business.

“It’s clearly not an enterprise software company with government customers,” Burke said. “It is a government contractor that is expanding and transferring some of its lessons to the private sector.”

Palantir is still growing revenue rapidly like a tech company, but because it invests heavily in sales and marketing, its profit margins are below typical software companies. At about $20 billion, Palantir would be valued in line with other business software makers such as Splunk and Elastic. At that price, public market investors would be betting the company can find new avenues of growth.

“It has achieved high growth. I think investors expect high growth to continue,” Burke said.

Pitchbook analyst Mark Cash said he expects the company’s margins to more closely emulate that of a software company over time, adding that it has shifted away from being purely a government consultant and now more closely resembles a software company.

“We view Palantir as a land-and-expand operation: a lot of upfront investments can be needed to land a customer, but incremental revenue starts outpacing costs as more subscriptions are added per customer, over time,” Cash said in an email.

Eric Munsun, a technology investor whose Adit Ventures firm invested in Palantir in 2014, said he thinks Palantir can double its customer base and its revenue in the next 18 months.

“This is the kind of inelasticity of demand that we like to see as investors,” said Munson, referencing Palantir’s surprisingly small customer base. “We like quality management teams who have experience and a commitment to their vision. These are committed customers who built their systems around Palantir’s technology.”