SpaceX Beats Revenue Estimates in First Public Earnings Call

SpaceX reported better-than-expected revenue in its first quarterly earnings call as a public company on Tuesday, posting $7.81 billion in revenue for the second quarter — a 92% jump from the year-earlier period. The company reported a net loss of $541 million, or 9 cents per share, less than half what analysts had expected, according to AP News.

Elon Musk faced tough questions from investors and analysts about Starship testing timelines, Starlink growth, AI infrastructure spending, and persistent rumors of a potential Tesla merger. The stock closed up 9.4% at $125.33 on the day of the report but dropped roughly 8% in after-hours trading as investors digested the company’s massive AI capital expenditure figures.

Context: A Record-Breaking IPO

SpaceX went public on June 12 in the largest IPO in market history, raising $75 billion and briefly making Musk the world’s first trillionaire. The stock opened at $150 per share and pushed the company’s valuation past $2 trillion on its first day of trading, as AP News reported.

But the shares have since fallen dramatically, dropping roughly 50% from their June peak of $225.64 to a low of $104.83 in early August. Investors have worried that Musk oversold the company’s future prospects, and they are bracing for volatile trading as insider lockup restrictions begin to expire.

Segment Performance and Key Metrics

SpaceX operates three main business segments. Its Space (rockets) segment generated $962 million in revenue, beating the $835 million expected. The Connectivity (Starlink) segment brought in $4.29 billion versus $3.83 billion expected, while the AI segment — encompassing xAI, Grok, and X — posted $2.56 billion in revenue against $2.18 billion expected, according to The Guardian.

Starlink now has 12 million subscribers, doubling from a year earlier, with average revenue per user at $66. The connectivity business remains SpaceX’s only profitable segment, generating $1.66 billion in operating income for the quarter.

AI Spending Under Scrutiny

Capital expenditures jumped more than sixfold year-over-year to $18.37 billion in the second quarter, with AI-related spending accounting for $15.83 billion of that total — more than double the $7.7 billion spent in Q1. The figure exceeded the $13.22 billion average analyst estimate, according to CNBC.

Musk announced on the call that SpaceX is partnering with Nvidia to design the Starmind AI-1 payload for orbital data centers, with Nvidia serving as the exclusive supplier of chips for SpaceX’s AI needs. He said the company expects to end 2026 with over 2 gigawatts of compute, growing to roughly 10 gigawatts by the end of 2027.

CFO Bret Johnsen defended the spending, saying on the call that “all capex is not the same” and that the company is “able to deploy capital in such a way that we’re getting less than a one-year payback” on AI compute investments. Johnsen also said SpaceX is on pace to reach $100 billion in annualized recurring revenue by the end of the year.

Lockup Expiration Looms

The earnings report comes just two days before a critical lockup expiration on August 6 that will release more than 900 million shares — roughly 20% of insider shares — for trading, more than doubling the current shares available. Additional lockup expirations are scheduled at 70, 90, 105, 120, 135, and 180 days post-pricing.

Kathleen Brooks, research director at XTB, noted the stakes ahead of the report: “This report comes at an important time, the share price crashed and burned in recent weeks, it is down 50% from its peak and is trading below its IPO price. Unsurprisingly, investors are jittery leading up to this report as it may determine the long-term direction for the stock,” as The Guardian reported.

Wall Street’s Divided Outlook

Wall Street analysts remain sharply divided on SpaceX’s prospects. J.P. Morgan analysts wrote that “SpaceX’s ambitions, and potential impact on humanity, are bigger than any company’s we’ve ever seen,” with a $225 price target by the end of 2027. Raymond James is the most optimistic, seeing $800 per share potential, while MoffettNathanson takes a more cautious stance with a neutral rating and $131 price target, according to AP News.

Musk, meanwhile, has been vocal about short sellers, who hold 34% of the float. In an X post on the day of the earnings call, he wrote: “I try to warn them, but they just double down…” — a remark that drew attention given the stock’s 9.4% surge during regular trading, as ZeroHedge noted.

What’s Next

With the earnings report behind it, SpaceX faces its immediate test on Thursday when the first lockup tranche hits the market. Investors will be watching closely to see whether the better-than-expected results can withstand the wave of insider selling, and whether Musk can convince the market that the massive AI investments will eventually pay off. The company’s next major milestone will be the planned tower catch of the Starship upper stage on Flight 14, which could serve as a significant positive catalyst if successful.