SpaceX Beats in First Public Earnings, but Record AI Spending Sinks the Stock

SpaceX's First Public Earnings: A Beat That Wasn't Enough

SpaceX published its first quarterly earnings report as a publicly traded company, and the numbers show a business being reshaped by two engines: Starlink now generates the group's profit, while artificial intelligence consumes most of its cash. Revenue in the second quarter of 2026 reached US$ 7.814 billion, up 92% year over year. The operating loss narrowed to US$ 143 million from US$ 970 million, the net loss fell to US$ 541 million from US$ 1.008 billion, and adjusted EBITDA came in at US$ 3.538 billion, a 191% jump with a 45.3% margin. Both revenue and the US$ 0.09 loss per share were better than analysts expected.

Starlink, reported under the Connectivity segment, brought in US$ 4.291 billion in revenue, up 66%, and accounted for roughly 55% of total sales. It was the only segment with an operating profit, posting US$ 1.656 billion in operating income. Subscribers doubled from a year earlier to 12 million, although average monthly revenue per user fell from US$ 85 to US$ 66. Enterprise and government revenue rose 108% to US$ 1.806 billion, helped by agreements with American Airlines, Southwest, Virgin Atlantic, Iberia and Aer Lingus, mobile partnerships with SoftBank, NTT Docomo and Spark NZ, and more than US$ 6 billion in Starshield contracts with the US government.

The stock, however, fell about 5% in after-hours trading after closing at US$ 125.33, up 9.43%. The trigger was capital expenditure: SpaceX invested US$ 18.369 billion in the quarter, more than six times the US$ 2.825 billion spent a year earlier and equal to 2.4 times quarterly revenue. AI absorbed US$ 15.828 billion, or 86% of total capex. In the first half, the company spent US$ 28.476 billion while generating only US$ 3.466 billion in operating cash flow. That gap was funded by the IPO and a bond sale, leaving about US$ 100 billion in liquidity.

Investors are now weighing whether that spending can deliver before the market's patience runs out. SpaceX has not given formal capex guidance. In the third quarter, it expects to close the US$ 60 billion acquisition of AI coding firm Cursor, and on August 6 the post-IPO lock-up expires, freeing shares worth close to US$ 100 billion. The company also continues to invest in Starship, whose development pushed the space segment's operating loss from US$ 369 million to US$ 542 million.

Starlink's Profit Machine vs. SpaceX's AI Cash Burn

Starlink Is the Group's Profit Engine

The quarter shows that SpaceX's valuation increasingly rests on Starlink. The segment's roughly 39% operating margin and adjusted EBITDA margin above 60% are the reason the parent company can absorb losses in AI and space. The 22% drop in ARPU is the important caveat: growth now comes from adding subscribers and selling to business and government clients, not from charging consumers more. With 42% of Connectivity revenue coming from enterprise and government at a 108% growth rate, the mix is shifting toward longer-term contracts, which should make revenue more predictable.

The AI Business Is Growing Fast but Still Burns Cash

AI revenue grew 247% year over year to US$ 2.561 billion and more than tripled sequentially, driven by services and infrastructure rather than advertising, which declined. SpaceX reported US$ 14.1 billion in contracted cloud services and US$ 1.6 billion of associated infrastructure revenue in the quarter, which gives the segment a visible near-term runway.

The adjusted EBITDA figure of US$ 1.146 billion is the first positive print for the segment, but it excludes US$ 1.885 billion in depreciation and amortization and US$ 516 million in stock-based compensation. Under standard accounting, the segment still lost US$ 1.257 billion. The investment pace, meanwhile, is staggering: US$ 15.828 billion of AI capex in one quarter, 21 times the year-ago figure and more than six times the segment's own revenue. That is the number investors reacted to.

Starship Remains the Cost Center

Space revenue grew 29% to US$ 962 million despite fewer launches, but the segment's operating loss widened to US$ 542 million as R&D spending jumped to US$ 1.076 billion for Starship. Management's argument is future-looking: rapid full reuse could cut launch costs by 99% or more, which would directly support Starlink deployment. For now, though, Starship is a cash consumer, not a profit contributor.

Why the Market Sold a Beat

The market's reaction makes sense given the valuation. At roughly 68 times trailing twelve-month sales, and up to 71.7 times at the closing price, SpaceX trades at the richest price-to-sales multiple on the Nasdaq. That leaves no room for disappointing news. The capex number is effectively the bill for the growth story, and with no formal guidance, investors cannot model how long the spending will continue. The August 6 lock-up expiry, releasing shares worth around US$ 100 billion, adds another source of supply. As IOL strategist Damián Vlassich put it, beating on revenue and EPS was not enough once the AI capex figure landed.

Three Numbers to Watch After the Lock-Up

The first public report gives investors specific indicators to track rather than a clear verdict. Each of the following is tied to numbers SpaceX already disclosed.

• Lock-up: August 6, two days after the earnings release, shares worth close to US$ 100 billion become eligible for sale. Watch volume and price action around that date, since supply can pressure the stock regardless of fundamentals.
• Capex guidance: The company provided no formal projection. Watch the next report for whether AI capex stays near the US$ 15.8 billion quarterly pace and how SpaceX addresses the gap between US$ 28.5 billion in first-half investment and US$ 3.5 billion in operating cash flow.
• Starlink revenue quality: With 12 million subscribers and ARPU down 22% to US$ 66, the key question is whether enterprise and government revenue, up 108% to US$ 1.8 billion, keeps lifting the mix and offsets consumer pricing pressure.
• AI monetization: The US$ 14.1 billion in contracted cloud services and the US$ 1.6 billion of infrastructure revenue recognized in the quarter show the business has demand; the question is whether it can reach operating profit under GAAP once depreciation and stock-based compensation are included.
• Cursor and Starship timing: The US$ 60 billion Cursor acquisition is expected to close in the third quarter, and Starship R&D is the main driver of the space segment's larger loss. Both will shape whether capex stays elevated.