• SpaceX’s Q2 revenue surged 92% to $7.8 billion, supported by strong growth across Starlink and its AI business, while its operating loss narrowed sharply.
  • However, total capital spending reached $18.37 billion, including $15.83 billion in AI-related investment, raising concerns about whether Starlink can continue funding the company’s costly expansion.

SpaceX released its first quarterly earnings report since going public, and the numbers told two different stories. Revenue nearly doubled from a year ago, driven by Starlink and the company’s fast-growing AI unit.

But spending on AI infrastructure also surged, and that made investors nervous. Shares fell sharply in after-hours trading, even though the company beat expectations on sales.

Revenue Beats Expectations

For Q2, SpaceX reported revenue of $7.8 billion, up from $4.1 billion a year earlier and above the $6.9 billion expected by analysts. Its loss per share came in at $0.09, compared with the expected loss of $0.26. ⁽¹⁾

The gains came from three main areas. Starlink, the satellite internet service, brought in $4.29 billion, more than expected. The AI division, which includes xAI, Grok, X and the company’s data-center operations, generated $2.56 billion. The space segment, which covers rocket launches and Starship development, brought in $962 million. ⁽²⁾

Operating losses decreased significantly, falling to $143 million from last year’s $970 million. Starlink was the main profit driver, with its operating income rising 79%. The AI division, on the other hand, still lost more than a billion dollars for the quarter, and the space segment lost over $500 million. ⁽³⁾

AI Spending Raises Eyebrows

The biggest story in this report was capital spending. SpaceX spent $15.83 billion into AI infrastructure alone, up from just $749 million a year earlier. Total capital expenditure came in above $18 billion, more than double the company’s entire quarterly revenue and well past what analysts had expected. ⁽⁴⁾

CEO Elon Musk said the company is expanding its AI computing capacity faster than any competitor and improving its models at the same time. The company also plans to expand its data center capacity to nearly 10 gigawatts by the end of next year, using Nvidia hardware only. ⁽⁵⁾

Even so, the market wasn’t convinced. Shares dropped 7.5% in after hours, wiping out earlier gains from the trading day. The stock is now down more than 20% from its first day of trading after the June IPO, which had valued SpaceX at roughly $1.75 trillion.

Starlink Keeps Growing

Starlink remains the backbone of the company’s finances. Subscribers doubled to 12 million by the end of the quarter, helped by expansion into new markets, aviation and maritime services, and government contracts.

However, average revenue per subscriber fell 22% from last year, mainly because SpaceX has been rolling out cheaper plans and pushing into international markets with lower prices. ⁽⁶⁾

SpaceX President Gwynne Shotwell said she expects Starlink to pull customers away from major carrier competitors such as T-Mobile, AT&T and Verizon. She also added that SpaceX wants to build an infrastructure to support mobile phone service, a move which could become more competitive with its rivals. ⁽⁷⁾

What Comes Next

Looking ahead, the company’s finance chief said capital spending would likely stay at similar levels for the next couple of quarters, meaning the AI investment cycle isn’t slowing down anytime soon.

The core question for investors is whether Starlink’s profits can keep funding the AI and rocket businesses long enough for those units to become profitable on their own. For now, SpaceX is betting heavily that they will.

Sources: ⁽¹⁾ ⁽²⁾ ⁽³⁾ CNBC, ⁽⁴⁾ ⁽⁵⁾ Wall Street Journal, ⁽⁶⁾ ⁽⁷⁾ Reuters