SpaceX’s first-ever earnings results beat analyst expectations across the board, yet the company’s AI spending figures rattled investors. Even though SpaceX reported a 92% jump in revenue and nearly tripled its adjusted EBITDA on an annual basis, investors were more focused on the aggressive capex cycle required to fuel its technology ambitions. As a result, shares slid 13.6% on August 5, the day following the earnings report.
Below, we break down SpaceX’s first-ever earnings report, using broker research and company documents from AlphaSense. Readers can also track sentiment across the broader Aerospace and Defense sector with the AlphaSense Sentiment Index.
Starlink Is the Cash Cow
Starlink, SpaceX’s satellite internet service, was the main driver of the company’s positive earnings results for the quarter, achieving 66% year-over-year revenue growth driven by the expansion of residential, business, and government contracts. Starlink received more than $6 billion of U.S. Space Force awards as well as new activations at airlines including Southwest, Virgin Atlantic, Aer Lingus, and Iberia, as well as a major agreement with American Airlines.
The business unit also doubled its user base to 12 million subscribers globally. These figures indicate that Starlink has transitioned from a growth project to the primary cash generator for SpaceX, according to broker research.
Space Launch Services
The space unit contributes less to financials than other business units but analysts still believe it’s growing at a healthy pace, with revenues up 29% year-over-year. SpaceX’s Falcon — a proven, partially reusable medium-to-heavy lift rocket family — had 38 total launches, which included 10 customers and 28 internal launches. That’s down from the previous year as SpaceX plans to wind down parts of the Falcon program in favor of Starship, the company’s next generation, super heavy-lift launch system.
SpaceX has progressed with a number of milestones for Starship following test flights 12 (in May) and 13 (in July) and the company is planning a 14th flight as soon as this month to send upgraded Starlink satellites to orbit. SpaceX will also attempt to return the rocket back to land for the first time versus previous ocean landings.
AI Solutions and Infrastructure
The space company’s AI segment turned into positive EBITDA territory earlier than analysts predicted. New cloud services agreements with Colossus, SpaceX’s data centers, totaled $14.1 billion in contracted cloud sales, which yielded $1.6 billion of incremental AI infrastructure revenue.
SpaceX signed AI compute agreements with major customers including Anthropic and Google, underscoring the company’s strategy of monetizing its compute buildout through third-party demand rather than just relying on internal AI initiatives. SpaceX is targeting 2 GW of compute by the end of 2026 and a minimum of 5 GW of compute by the end of 2027.
Earnings Aftermath
Despite the strong operational beat, SpaceX shares dropped following the report due to fears of high capex spending and management’s aggressive future targets. Consolidated capex reached $18.4 billion, which was $3.5 billion higher than industry experts expected. About $5 billion of the overage came from spending related to the AI business, which was partially offset by lower-than-expected capex in the Space and Connectivity (Starlink) segments.
During the earnings call, management also provided longer-term targets including a $100 billion revenue run-rate by the end of 2026 and $1 trillion of revenue in 2030, up from 2031. One more wildcard for SpaceX’s share price is the upcoming expiration of the first round of post-IPO lock-up periods. The first lock-up expiration, which will allow early investors and employees to sell shares, occurs on August 6.
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