Elon Musk hailed the second-quarter earnings report for SpaceX as "another milestone year" for the company, which announced a $7.81bn revenue haul. That number represented a 92% jump from June and easily outpaced analysts' $6.93bn projection. However, the numbers did little to calm investor nerves, as the company's stock plummeted more than 8% in after-hours trading. The report offered a rare look into the financials of the trillion-dollar company, which went public in June and has since faced a rocky stock performance.
Starlink is the only profitable unit
Despite the impressive revenue growth, SpaceX remains unprofitable. The company reported a $541m loss for the quarter, an improvement from a $1bn loss in the same period last year. The only profitable segment of the company is Starlink, its satellite internet service, which earned $4.29bn in revenue. By comparison, the entire company generated $18.7bn in revenue last year but recorded an operating loss of $4.3bn. The only business unit showing a profit is the connectivity arm, which stands out in an otherwise loss-making landscape.
Stock price remains under pressure
The earnings report arrived at a crucial moment for the company as the stock has faced a significant decline since the June IPO. After the blockbuster debut, which valued SpaceX at $2tn and briefly made Musk the world's first trillionaire, the stock has dropped by 24%. It is now trading below its IPO price. Analysts noted the timing of the report as particularly significant, since investor confidence remains low as the company continues to grapple with profitability.
Kathleen Brooks, research director at global brokerage firm XTB, highlighted the report's potential to shape the stock's long-term trajectory. "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," she stated. With uncertainty surrounding the company's long-term financial health, the report offered a mix of hope and caution for shareholders.
The company provided a detailed breakdown of its business segments, revealing that the space division earned $962m, exceeding the forecast of $835m. The AI division also outperformed expectations, generating $2.56bn compared to the anticipated $2.18bn. These results are set against the backdrop of the company's upcoming first lockup expiration on Thursday, when over 900m shares will become available for trading. This represents a significant increase in the number of shares in circulation and could further pressure the stock price. The firm spent $18.4 billion on capital expenditures during the quarter, well above analysts' expectations of $13 billion, as it continued investing heavily in artificial intelligence infrastructure. The $18.4 billion capex was largely driven by AI compute infrastructure, which accounted for nearly $16 billion of the total, significantly surpassing the $13.2 billion analysts had expected and the $10.1 billion in capex in the first quarter.
During the earnings call, Musk and other executives outlined major strides in the Starship rocket program and outlined the company's ambitious moon city vision. Gwynne Shotwell, president of SpaceX, remarked, "We want to put boots on the moon by at least 2028." Musk described the goal as sounding "like super sci-fi" but insisted it would become a reality. The company is making rapid progress, with more Starlink satellites launched into orbit and preparations underway for the next phase of its lunar ambitions.
Thomas Monteiro, a senior analyst at Investing.com, praised the report for its "few positives" for the SpaceX leadership team. However, he warned that the long-term success of the company will depend on its ability to handle capital expenditures and improve free cash flow in a market that is increasingly wary of high spending and negative cash flow. As investors wait for further signs of progress, the company must navigate a challenging landscape and deliver on its bold promises to secure investor confidence.