SpaceX reported its first quarterly earnings as a public company on Tuesday, posting a net loss of $541 million on revenue that nearly doubled to $7.8 billion.
The results beat Wall Street expectations. Revenue jumped 92 percent from $4 billion in the same period a year earlier, while the loss of nine cents per share came in at less than half what analysts had predicted. LSEG had forecast revenue above $6.9 billion, and Bloomberg analysts expected $6.8 billion.
But investors focused on spending. Capital expenditures soared more than sixfold to $18.37 billion, more than double total sales for the quarter and well above the $13.22 billion average estimate compiled by FactSet. The stock, which had finished the regular session up 9.4 percent, tumbled as much as 8 percent in after-hours trading.
Compute deals drive the surge
Well over 80 percent of capital expenditures went toward artificial intelligence, a market where SpaceX trails OpenAI, Anthropic, and Google in models and services and now competes against cloud giants Microsoft, Amazon, and Google by selling compute capacity. The spending comes amid a broader wave of AI investment across the technology industry, with Alphabet and Amazon each projected to spend over $200 billion this year and Microsoft and Meta not far behind. Two deals announced before the IPO anchored the revenue surge. Anthropic agreed to pay up to $1.25 billion a month for three years for compute capacity at SpaceX’s Colossus data center in Memphis, Tennessee. Google signed an agreement worth up to $920 million a month. A separate arrangement with Reflection AI could bring in up to $150 million a month.
SpaceX had built out two data centers in and near Memphis to train its own Grok models, but the AI division struggled to catch up to leading labs and pivoted to renting that capacity to rivals. “The incremental revenue from new hosting deals generated high incremental EBITDA margins as we monetized available compute capacity,” Johnsen said on a conference call.
Executives pitch the future
The AI division generated $2.5 billion in revenue during the quarter but posted an operating loss of $1.2 billion. SpaceX operates three segments: space, AI, and connectivity, which is the Starlink internet service. The space segment showed a $542 million net loss against $962 million in revenue. Starlink remained profitable. The satellite-internet unit brought in $4.2 billion in revenue, according to The Verge, and the company said it had launched 20 of a new generation of heavier Starlink satellites designed to be deployed 60 at once. Starlink has continued to expand its global subscriber base through a growing range of consumer, enterprise, aviation, maritime, and government services.
Musk went further. He told investors that the $100 billion annualized recurring revenue target for December was assured. “That’s what we would achieve if we basically did nothing,” Musk said, adding that the figure probably would be higher. Johnsen said the company had contracted $6.7 billion in cloud services revenue over a six-month period beginning in October and projected the $100 billion run-rate assuming the $60 billion acquisition of AI startup Cursor closes. Musk said they were “close to that” but did not want to “jump the gun” on regulatory approval.
The company ended the quarter with $100 billion in cash after a successful post-IPO bond sale. It reported more than $28 billion in capital expenditures through the first half of the year, up from $7 billion in the same period of 2025. SpaceX also secured $6 billion in new US government contracts for Starshield, its national security satellite system, and completed two successful launches of Starship V3. The company partnered with Nvidia to use its chips in planned Starmind AI orbital compute satellites, expected to launch next year.
Musk said the company currently has 1.4 gigawatts of compute power ready to use and expects capacity to reach at least 10 gigawatts next year. He described a series of projects cumulatively totaling 20 gigawatts of capacity, including power and cooling, by the end of next year, though he cautioned that some would not pan out on time and estimated 15 gigawatts at the power plant level. “Data centres are a trivial problem compared to making reusable rockets,” Musk said.
Legal troubles persist. Grok, SpaceX’s AI model, has faced lawsuits around the globe for generating sexualized images of people without consent, and the chatbot previously drew controversy for calling itself “MechaHitler.” Musk’s longer-term ambitions include building data centers in space, an idea the company touted in its IPO prospectus as something it could do better than anyone else.
The company’s shares have struggled since the largest IPO in history raised more than $85 billion at a valuation of $1.75 trillion. The stock peaked at $176 on its first day of trading in June but has since fallen below the $135 debut price reportedly set by Musk, closing Tuesday at just over $125 before declining further after hours. Musk said during the call that people seemed to be “underestimating” SpaceX, and he predicted the company would reach $1 trillion in revenue by 2030, a year earlier than he estimated six weeks ago.