In its first quarterly earnings release since its $86 billion blockbuster IPO in June, Elon Musk’s SpaceX grew its revenue, sharply cut its losses and beat Wall Street’s expectations.
The Texas rocket, internet and AI company founded and run by the world’s richest man reported a second quarter loss of $541 million, compared to a $1 billion loss for the same period a year ago. Revenue rose 92% to $7.81 billion.
The loss amounted to 9 cents a share, less than the 24 cent forecast by Wall Street analysts, while revenue topped the $6.81 billion analysts polled by Bloomberg had estimated.
Capital expenditures rose dramatically to $18.4 billion in the quarter, up from $2.8 billion a year ago largely due to investments in its artificial intelligence unit.
“We had an exceptional second quarter,” said SpaceX President Gwynne Shotwell, during a call with analysts. “It really feels like we’re just getting started all over again.”
SpaceX shares closed up $10.80, or 9.4%, to $125.33 on the Nasdaq Tuesday in advance of the earnings report, which was released after markets closed.
Founded in 2002 in El Segundo, SpaceX moved its headquarters from Hawthorne to Texas in 2024. However, it retains large operations in the South Bay city and blasts off regularly from Vandenberg Space Force Base in Santa Barbara County.
The second quarter earnings were driven by sharp growth in the company’s connectivity business, which includes its Starlink internet broadband business.
Net income rose 79% to $1.66 billion, while revenue grew 66% to $4.29 billion. Shotwell said the company had a net gain of 1.7 million subscribers in the quarter, with 9,600 Starlnk satellits now in orbit. It also signed a new contract with American Airlines.
The company’s rocket business experienced a wider loss of $542 billion, compared to $369 billion a year ago. That was due to heavy capital spending on its massive Starship rocket, with SpaceX investing some $15 billion on its development
Its rocket business revenue rose 29% to $962 million as its smaller workhorse Falcon 9 rocket continues to dominate the launch business.
Much of the earnings call was spent talking about the company’s huge investment in its AI business, the biggest driver of interest in the massive initial public offering.
The company posted AI revenue of $2.56 billion for the quarter, up from $737 million a year ago. It also cut its losses from $1.52 billion to $1.26 billion, better than the consensus loss estimate of $2.39 billion.
Musk said that the company will release a version of its Grok large language model chatbot at the end of the year that will incorporate “all the data that SpaceX has ever produced, which is a tremendous amount of the course of a quarter century.”
The company in June reached deal to sell its AI computing power to Google for $920 million a month as part of a cloud services deal through mid-2029. SpaceX has a similar agreement with Anthropic.
The earnings report must have come as somewhat of a relief for investors, though shares were down in after hour trading, giving back the day’s gains.
Eager buyers of the IPO have been humbled by the stock’s fall since its June 12 debut. Shares were offered at $135 and closed up 19% on its first day of trading.
Since then, fears the company’s earnings could not keep up with the hype surrounding the IPO cut their price Friday to $108.37, less than half their high of $225.64 in June.
The drastic fall erased more than $1 trillion in market value from the company though it still retains a $1.6 trillion market cap. In the process, Musk has lost his trillionaire status.
Still, the stock trades at about 448 times earnings estimates for the next 12 months, the highest multiple of any member of the Nasdaq 100 Index.
And it doesn’t help that the first lockup period for inside shareholders ends on Thursday. As many as 911.5 million more shares worth some $100 billion will become eligible for sale, likely putting more pressure on the price.
SpaceX’s results come on the heels of a strong run of earnings reports from big AI spenders or hyperscalers, including Alphabet, Microsoft and Amazon.com.
Investors are rewarding companies that are showing clear payoffs from their capital expenditures. Shares of Amazon and Microsoft surged following the companies’ results.
Bloomberg News contributed to this article.
