Business Insider SpaceX delivered its first earnings report since the IPO, with the stock down 15% and a lockup period expiring on August 6.
SpaceX delivered its first earnings report since going public in June, arriving at a sensitive time for the stock, which has tumbled 15% from the $135 offering price.
SpaceX shares dropped 7% after hours following earnings, which revealed better-than-expected revenue but higher-than-expected AI capex. While overall capex came in slightly below analysts' estimates, AI-related investments totaled $15.8 billion for the quarter, compared with Wall Street's $13.09 billion estimate.
Quarterly revenue came in at $7.8 billion, compared to Wall Street's estimate of $6.81 billion. The company has yet to turn a profit, reporting a net loss of $541 million for the period. Wall Street wasn't expecting a surprise profit.
On a follow-up call with analysts, CEO Elon Musk said SpaceX was expected to hit a $100 billion annualized revenue run rate by the end of the year, and had moved up its internal projection for crossing $1 trillion in overall revenue from 2031 to 2030.
Starlink, its satellite internet business and main moneymaker, reported fewer-than-expected subscribers, reaching 12 million compared to analysts' estimate of 12.19 million.
The report comes two days before a lockup expiration is set to significantly increase the public float, or the amount of stock available to trade. On August 6, insiders and early investors will be allowed to sell nearly a billion shares into the market, or about $106.4 billion worth of stock based on Monday's closing price.
Scroll on for the play-by-play of SpaceX's earnings call with analysts: See you next quarter!
Shotwell says SpaceX is deploying technology that could put a "cellular base station on basically the gear that holds the Starlink broadband dish," instead of deploying ground-based cellular systems. That, she says, could save SpaceX a lot of CapEx.
Musk agreed that this was "quite an important point."
Cursoracquisition One analyst asks about the combined work with Cursor. Musk avoided answering, saying he doesn't want to be "jumping the gun" with regulators before the acquisition closes.
"We'll probably make some announcement or discussion of that outside the earnings call," he said.
computewill feed Grok The percentage of compute for Grok training will decrease over time, Musk says. He estimates about 10% will go to the company's in-house model. More of that compute will be rented to others, Musk says.
Shotwell says SpaceX is looking to conquer Verizon, AT&T, and T-Mobile customers, a market, she says, is worth $600 billion a year.
"I anticipate us to be able to acquire quite a few of their customers," she says.
Something Musk likes to do during earnings calls and is doing now is to continue to push the bar of SpaceX's targets. (This is the kind of thing SpaceX employees surely *love *to hear.)
It's not 10 GW of targeted nameplate compute. It's 20 GW. It's not $100B ARR, but possibly higher. "I think it may be higher than that," Musk says, adding that the $100 billion ARR is "if we did nothing."
What's the limiting factor in AI development? Musk points to memory. Memory output is increasing by around 20% a year, he says. "Ask yourself: is the demand increasing by 20% a year? No, the demand is increasing by 200% a year, maybe higher."
The price of memory will increase, Musk says, calling it "Economics 101."
[Anthropic](/glossary/anthropic)
While discussing how far AI has come over the past year, Musk is showing some love for Anthropic, one of Grok's biggest competitors (but also a SpaceX compute customer).
He says Anthropic's rollout of [Claude 4](/compare/claude-4-opus-vs-gpt-o3).5 should be "considered one of the milestones" in the AI industry.
Musk says that intelligence per watt is "increasing rapidly," leading to smaller models "doing more and more amazing things."
In describing the difficulty of the engineering challenges SpaceX faces, Musk takes a thinly veiled swipe at one of the company's rivals, Jeff Bezos' Blue Origin.
"Let me tell you what rockets desperately want to do every flight, they desperately want to blow themselves into tiny pieces, and then the engineering struggle is to convince the rocket not to blow itself into tiny pieces and actually deliver payload to orbit," he says. "But you'll note that, you know, some of our competitors do, in fact, blow their rockets up."
Musk says the struggles, which were likely a reference to Blue Origin's New Glenn rocket explosion in May, do "not mean they're incapable. In fact, I think our competitors are very smart people, but despite being very smart, the rockets still blow up."
Musk says SpaceX expects "the cadence of flights to be increasing rapidly." He predicts a "flight a day, possibly more," by next year.
That's a huge ramp-up compared to the past quarter. SpaceX launched 38 rockets in the past quarter, which measures out to a launch every 2 and a half days.
Musk says that he was "a little worried" about Starship's 13th test flight. "I think of Apollo 13," he says. "Things went wrong on that flight." (This one went "incredibly well," he says.)
Musk says "internal projections" for reaching $1 trillion in revenue have moved up from 2031 to 2030, with a "non-zero" chance the milestone could occur in 2029.
SpaceX's CFO says he's "very proud" of how SpaceX has been efficient with its spending. He also predicts that spending levels won't significantly increase in the back half of the year.
"I think you should probably think that the next two quarters are very similar to the current quarter from a capex level perspective," Johnsen says.
Musk says that SpaceX will build factories on the moon, where robots will be helpful. "It sounds super sci-fi right now, but it's going to happen," Musk says.
He plans for a "mass accelerator" on the moon, which he says could scale to 1000x Earth's economy.
Musk says that SpaceX's "understanding with Nvidia is that we will receive a very significant percentage of their GPUs next year."
Nvidia CEO Jensen Huang has repeatedly talked about the pent-up demand for the company's advanced chips, meaning the arrangement could be a nice boost for SpaceXAI in the broader generative AI race.
Musk says that SpaceX's hardware know-how is being applied to build AI compute infrastructure.
"We're taking a small amount of expertise that we use for rockets and satellites and applying that to commercial data centers," he says.
President Gwynne Shotwell is very optimistic about SpaceX's ability to sell Starlink to even more enterprise customers.
"Enterprise revenue is quite sticky," she says. "We have never lost an enterprise customer. They're quite happy with the Starlink capability that we have right now."
Musk adds that SpaceX is "building up a large enterprise sales team" to go out and tout Starlink's capabilities and show just how much they have advanced.
The company has already signed $6.7 billion in cloud services revenue in the first few weeks of the third quarter, CFO Bret Johnsen says. Including expected revenue from Cursor, SpaceX says it expects to reach a $100 billion annualized revenue run rate by the end of 2026.
SpaceX shares are still trading down over 6% after hours as the Q&A with Wall Street analysts begins.
President Gwynne Shotwell says that she is "quite bullish" on government contracts for Starlink. Musk chimes in to say that he expects enterprise revenue to "substantially exceed consumer revenue."
Johnsen expects "robust demand" for SpaceX's cloud services business. Each agreement has "increasingly favorable economics," he says, and the company expects the "supply-demand imbalance" to continue.
Bret Johnsen says capital allocation priorities will focus on three areas: Starship development, next-generation Starlink broadband and mobile constellations, and AI compute infrastructure.
"We plan to continue to invest aggressively in the three areas we believe generate the highest long-term returns," he says.
SpaceX chief financial officer Bret Johnsen says the "initial ramp" from leasing out AI compute at the company's massive Colossus one and two data centers brought in $1.6 billion.
Johnsen says that SpaceX narrowed its net operating loss on AI to $1.3 billion "and turned adjusted EBITDA positive for the segment in the second quarter at $1.1 billion."
CFO Bret Johnsen says revenue from government contracts is a "durable source of revenue." SpaceX just reported a 108% increase in enterprise and government revenue.
SpaceX's chief financial officer, Bret Johnsen, is speaking now. He starts by talking about SpaceX's finances for each segment.
Shotwell says token consumption "tripled" following the July release of Grok 4.5.
President Gwynne Shotwell shouts out a new agreement with American Airlines, as well as work with Southwest, Virgin Atlantic, Iberia, and Aer Lingus. The customer feedback has been "outstanding," Shotwell says.
She references some customers who are taking shorter connecting flights instead of going direct, "so that they can ensure that they're on a Starlink-activated flight." SpaceX's airline customers had "never seen this in the business before," she says.
SpaceX President Gwynne Shotwell says the company's Starlink segment had its " best quarter of new customers to date."
The success comes after SpaceX raised prices for almost all Starlink plans.
SpaceX's president, Gwynne Shotwell, is speaking now. She starts by talking about how many rocket flights took off during the past quarter.
Musk says he anticipates Starmind, SpaceX's AI satellites, to launch as soon as next year.
"This is not some sort of far future, distant thing," he says.
Musk says SpaceX has "decided to build exclusively on Nvidia," because it has "the best architecture." Nvidia, which was trading down less than a percent after hours, turned positive after Musk's remarks.
Grok 4.6 is coming out "probably next week," Musk says, and Grok 4.7 is three or four weeks out. "We expect the cadence of AI development to improve dramatically," he says.
Grok 5 should be out "before the end of this year," Musk says, and will incorporate "all the data that SpaceX has ever produced."
Musk is hyping up SpaceX's cash cow, saying people are "underestimating Starlink," its internet satellite service. He repeats a prediction he's said before: that it will eventually deliver a majority of the world's internet.
Elon Musk is saying he wants competitors to start building more satellite constellations. "So we do encourage our competitors to copy us, but it's quite difficult to copy something like Starship," he says.
He shouts out the company's success with Starship, its internet connectivity efforts, and its AI compute capacity building. "It's difficult to explain to most people just the incredible significance of Starship," Musk says.
"On Flight 14 will be our first flight to fly our version three Starlink satellites, our communication satellites, to operational orbit," Musk says. "We will try to actually catch the first and the second stage of Starlink V3 this year, and we could possibly catch the ship as soon as the next flight."
SpaceX CEO Elon Musk, CFO Bret Johnsen, and President Gwynne Shotwell are on the call.
SpaceX says it's making a lot more money from enterprise and government contracts — revenues from those agreements are up 108% from a year earlier and 63% from the first quarter.
The company is highlighting recent agreements with American Airlines, Southwest, Virgin Atlantic, Iberia, and Aer Lingus.
SpaceX spent $15.8 billion on AI-related capital expenditures in Q2, surpassing analysts' estimates of $13.09 billion.
SpaceX's report further illustrates the degree to which the company is ramping up its investment in AI. In Q1, SpaceX spent $7.7 billion on AI capex. The difference is even more staggering when you look at just one year ago. SpaceX said in Q2 2025, when the company was still private, it spent $749 million on AI-related capex.
Overall, SpaceX's capex has swelled from over $2.8 billion in Q2 2025 to $18.3 billion in Q2 2026. AI is far and away the biggest reason for the increase.
SpaceX says Starship V3 completed two successful test flights in 90 days — bringing SpaceX closer to its goal of full and rapid reusability.
In May, Flight 12 launched from SpaceX's new Starbase pad and deployed modified Starlink satellites.
In July, after the quarter ended, Flight 13 deployed 20 production V3 Starlink satellites and achieved "the softest ever splashdown of Starship," the company says.
The stock had closed up nearly 10% during regular trading.
Revenue: $7.8 billion vs. $6.81 billion estimate** Capital expenditure**: $18.37 billion vs. $18.58 billion estimate** Net loss**: $541 million** AI segment revenue**: $2.561 billion vs. $2.08 billion estimate** Starlink subscribers:12 million vs. 12.19 million estimate Space segment net sales:$962 million vs. $873.7 million estimate Connectivity segment revenue**: $4.29 billion vs. $3.88 billion estimate
Retail investors have been a major driver of the success of Musk's companies in the stock market, and last week SpaceX launched a forum for shareholders to submit questions ahead of the company's first earnings call.
The online Q&A — built by SpaceX's AI tool, Grok, and seemingly open to anyone to post — quickly went off the rails.
Serious questions about SpaceX's business competed with memes and posts promoting obscure cryptocoins, and the top-voted question on the forum is about the company's Shiba Inu plushie mascot, Asteroid. Hard to see Musk answering that one.
Open models have upended the AI industry. As Washington considers what, if anything, to do about the China-based competition, Musk has put himself squarely in the camp of preserving access.
Musk was one of the first frontier AI CEOs to signal his support for a pro-open source AI alliance led by Nvidia CEO Jensen Huang. Huang helped organize an open letter, signed by companies such as Microsoft, Meta, and Mistral, that defended the use of open models.
"This has my full support," Musk wrote on X. "Jensen is right."
The letter compared open AI models, in which companies release weights that allow users to download and run the models themselves, to the way developers pushed for open software in the 1980s.
After the letter went viral, several other companies and CEOs signaled their support, including OpenAI and Google.
The advocacy came after Moonshot AI's Kimi K3 model's capabilities impressed many in the industry. Subsequent releases, including those from DeepSeek, have placed greater emphasis on the cost efficiency of open-weight models that operate at a fraction of the cost of proprietary competitors like Anthropic's Claude Opus 5 and OpenAI's GPT-5.6 Sol.
AI capex spending remains the talk of Wall Street. Tuesday's earnings report will shed further light on how well SpaceXAI is fulfilling its lofty ambitions. SpaceX previously reported spending $10.1 billion on capex in the first three months of 2026. Of that total, $7.7 billion was devoted to AI.
In its pre-IPO prospectus, SpaceX said that it planned "to prioritize growth and investment to capture significant opportunities in AI applications and compute infrastructure." The company estimated that over 90% of its whopping $28.5 trillion total addressable market would be related to AI.
Elon Musk's most ambitious science fiction-inspired plans — from orbital data centers to colonizing Mars — hinge on the success of Starship.
The 400-foot-tall reusable megarocket is running several years behind schedule and has not always stuck the landing. However, SpaceX's most recent test marked a key milestone when Starship's upper stage achieved a "soft splashdown" in the Indian Ocean.
The flight didn't go entirely to plan, with the rocket's giant booster stage suffering engine failures during landing, causing a harder splashdown. But the otherwise successful launch suggests SpaceX is inching closer to its goal of routinely carrying commercial cargo — and eventually humans — into orbit and beyond.
The earnings call comes ahead of a huge test for SpaceX's beleaguered stock price. On Thursday, the first tranche of SpaceX shares will exit the lock-up period designed to prevent employees and investors from selling their shares immediately after the IPO.
Around 912 million shares worth over $100 billion will become available to sell, and analysts have warned that a wave of shares hitting the market could send SpaceX's stock price on a very bumpy ride.
Thursday is the first of several scheduled lock-up expiries for SpaceX's shares over the next year. The largest, which takes place a year after the rocket company went public, will see all of Elon Musk's 6.4 billion shares become available to sell.
Nicholas Owens, an equity analyst at Morningstar, said he'll be watching Starlink's revenue and subscriber growth, as it's SpaceX's only profitable business line at the moment.
"Starlink is currently the earnings engine for the company, and it can partially fund the AI expansion plans," Owens said in a July 30 report.
Owens said he's watching for Starlink's subscriber base to grow by 93% in 2026.
In Q1, Starlink brought in an operating profit of $1.19 billion.
Analysts at Morgan Stanley said they expect SpaceX to miss on earnings and post a slightly larger-than-expected loss for the quarter.
The bank pointed to the concept of Max Q, or maximum dynamic pressure, which represents the point of a rocket's launch when pressure on the aircraft reaches a peak.
"We believe Max Q is analogous to what SpaceX shares are experiencing heading into its first reported quarter as a company. The dynamic stress on the stock price from an unprecedented amount unlocked shares following 2Q results," a team led by Adam Jonas wrote.
Betting against Elon Musk has a history of backfiring, but that hasn't stopped short sellers from piling into SpaceX in recent weeks.
Short interest in SpaceX's stock has increased by around a third since mid-July, according to data from financial intelligence firm S3 Partners, hitting an estimated notional value of $26 billion. Matthew Unterman, S3's managing director, told Business Insider that around 35% of the company's float is now sold short.
So far, it's paying off for the short sellers. S3 estimates that they have booked paper profits of over $8 billion since the IPO, as SpaceX's market cap has collapsed by more than $1 trillion since its peak in June.
SpaceX's lockup expiration schedule is "unusually complex," analysts at Bernstein wrote on Monday. The company will unlock insider shares at nine distinct points in time, rather than unlocking most insider shares at a single point 180 days following the IPO.
SpaceX shares will likely face pressure until most lockups expire at the end of the year, the firm added.
"We do not attempt to predict how shares will move as expirations come up in succession into December. But, we have found many investors unwilling to buy SpaceX shares in the interim, based on fundamentals, given the lockup overhang that will exist at least into December," analysts wrote.
Jay Wood, chief markets strategist at Freedom Capital Markets, says investors will be focused on the forecast for the coming year and beyond. He said that the most pressing item on investors' minds will likely be capex spending, the central theme of Q2 earnings season.
"In particular, look for guidance on spending for Starship, Starlink, AI infrastructure and other long-term initiatives," he said. "It's known that SpaceX will keep investing, the real question is whether management can convince investors those investments will generate meaningful returns without sacrificing the path to profitability and free cash flow."
Woods added that investors hoping to hear CEO Elon Musk address a potential SpaceX and Tesla merger will likely be disappointed.
SpaceX's first-ever earnings report has the potential to turn the narrative around for the stock, assuming that CEO Elon Musk talks up his outlook for the company, Hardika Singh, a strategist on Fundstrat's Market Intelligence team, wrote this week.
"If Tesla's earnings calls are any guide, Chief Executive Elon Musk will likely boast about his grandiose ideas and make aggressive projections," Singh wrote. "If he skips that playbook tomorrow because of the recent bloodbath in tech stocks, then that would be a further hit to sentiment."
Musk will likely avoid giving guidance on SpaceX's profitability, she added. The company reported a net $4.9 billion loss in 2025.
Deutsche analyst Edison Yu rates SpaceX stock as a "Buy" and maintains a bullish $255 price target as the company heads into its first earnings report.
In a note to investors, Yu wrote that his team attributes much of the stock's recent volatility to fears about shares flooding the market as staggered lockup periods expire.
"We are optimistic, following the lock-ups coming off, that the stock can stabilize at some level," Yu wrote. "Moreover,announcing a large government/sovereign AI deal would be viewed positively for the stock."
Second quarter
- Revenue estimate $6.81 billion (Bloomberg Consensus)
- AI segment operating loss estimate $2.39 billion
- Net loss attributable to holders estimate $2.11 billion
- Loss per share estimate 24c
- Pro forma loss per share estimate 24c
- Starlink subscribers estimate 12.19 million
- Starlink ARPU estimate $65.60
- Adjusted Ebitda estimate $2 billion
- AI segment adjusted EBITDA Loss estimate $15.5 million
- AI segment total revenue estimate $2.08 billion
- Space segment adjusted EBITDA loss estimate $409.9 million
- Space segment net sales estimate $873.7 million
- Connectivity segment adjusted EBITDA estimate $2.41 billion
- Connectivity segment revenue estimate $3.88 billion
- Total Costs & Expenses estimate $8.52 billion
- Capital expenditure estimate $18.58 billion
- AI segment capital expenditure estimate $13.09 billion
- R&D expenses estimate $4.39 billion
- Cash and cash equivalents estimate $93.78 billion
- Total assets estimate $189.49 billion
Year
- Capital expenditure estimate $45.52 billion
Source: Bloomberg
Business Insider Get AI news in your inbox
Daily digest of what matters in AI.
Key Terms Explained #
Anthropic An AI safety company founded in 2021 by former OpenAI researchers, including Dario and Daniela Amodei.
Claude Anthropic's family of AI assistants, including Claude Haiku, Sonnet, and Opus.
Compute The processing power needed to train and run AI models.
Generative AI AI systems that create new content — text, images, audio, video, or code — rather than just analyzing or classifying existing data.