SpaceX reported its first earnings as a public company on Wednesday, posting revenue that nearly doubled in the second quarter as rapid expansion of its Starlink satellite internet business and AI operations boosted investor optimism around Elon Musk’s long-term growth strategy.
However, the results also highlighted the enormous capital requirements needed to build the company’s next generation of AI infrastructure, data centers and space technologies, prompting investors to send the stock lower in after-hours trading.
The results offered the first detailed look into the financial engine underpinning SpaceX’s $1.75 trillion valuation following its record-breaking initial public offering in June. They suggest the company is attempting to replicate the playbook that has rewarded leading AI infrastructure firms: aggressively investing today in computing capacity and digital infrastructure in anticipation of years of high-margin recurring revenue.
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Revenue for the three months ended June 30 surged to $7.8 billion from $4.1 billion a year earlier, comfortably exceeding Wall Street estimates compiled by LSEG. Starlink, now the company’s largest business, generated more than half of total revenue after sales climbed 66%, while revenue from SpaceX’s AI operations soared roughly 250% year over year.
The company said it expects to achieve a $100 billion annualized revenue run-rate by December, underscoring management’s confidence that demand for satellite connectivity and AI computing remains exceptionally strong despite growing competition across both industries.
“We’re building AI compute capacity at scale faster than anyone else, we believe, and we’re significantly improving our AI models,” Musk told investors during the post-earnings conference call.
Management also said it expects investments in AI infrastructure to generate payback in less than one year, an unusually short return period that reflects surging demand for large-scale computing capacity as enterprises accelerate artificial intelligence adoption.
The company plans to launch at least 1,000 next-generation V3 Starlink satellites over the next year while expanding into mobile communications, setting the stage for more direct competition with traditional wireless carriers.
SpaceX President Gwynne Shotwell said the company expects to win “quite a few” customers from major U.S. telecom operators including T-Mobile, AT&T and Verizon as Starlink evolves beyond satellite broadband into a fully integrated mobile communications platform combining space- and ground-based infrastructure.
The optimism surrounding revenue growth was tempered by an extraordinary increase in spending.
Capital expenditure expanded to more than $18 billion during the quarter from $2.83 billion a year earlier, with AI investments alone soaring to $15.83 billion from just $749 million. Chief Financial Officer Bret Johnsen cautioned that capital spending would likely remain at similarly elevated levels over the next several quarters as the company continues building data centers and AI infrastructure.
The scale of investment illustrates the increasingly expensive race among AI companies to secure computing power. As technology giants and AI developers compete to build larger models, demand for graphics processors, data centers and electricity has triggered an unprecedented infrastructure spending cycle across the industry.
Unlike many competitors that lease cloud computing resources, SpaceX is pursuing a vertically integrated strategy by building much of its own AI infrastructure, betting that owning computing capacity will generate higher long-term returns while reducing dependence on third-party cloud providers.
Despite the heavy spending, profitability showed signs of improvement.
Total operating losses narrowed sharply to $143 million from $970 million a year earlier. AI-related operating losses also improved, while operating income at Starlink jumped 79%, suggesting the satellite business is becoming increasingly capable of funding the company’s broader expansion strategy.
“That’s a tremendous upside surprise today alone, the fact that AI is already monetizing itself. They’re not relying on Starlink to fund operations there. I think that’s a huge part of the story,” Reuters quoted Brian Mulberry, chief market strategist at Zacks Investment Management, as saying.
Thomas Monteiro, an analyst at Investing.com, said investors were primarily evaluating whether SpaceX’s ambitious strategy could translate into sustainable financial performance.
“The central question for SpaceX’s first quarter as a public company was whether the machine underneath the story actually works, and on that question Elon Musk and his team delivered a few positives,” Monteiro said.
Nevertheless, investors remained cautious.
SpaceX shares fell 7.5% in after-hours trading after climbing 9.4% during the regular session ahead of the earnings release. The stock has declined about 8% since its IPO, and analysts note additional volatility could emerge as the company’s post-listing lock-up period begins to expire, potentially allowing insiders and early investors to sell shares.
Starlink continued to strengthen its position as SpaceX’s primary earnings engine.
Subscriber numbers doubled to 12 million from a year earlier, supported by expanding consumer, enterprise, aviation, maritime and government services. However, average revenue per subscriber declined 22% as the company expanded into more international markets and introduced lower-priced service plans to accelerate customer acquisition.
Meanwhile, SpaceX’s AI business—which includes xAI, Grok, social media platform X and an expanding network of AI data centers—is beginning to generate meaningful commercial revenue. The company disclosed that it has secured AI computing contracts with Anthropic, Google and Reflection AI, although management said part of that recurring revenue has yet to be recognized.
Musk said SpaceX expects to build more than two gigawatts of AI computing capacity this year and expand that figure to nearly 10 gigawatts by the end of next year. The company plans to build its AI infrastructure exclusively using Nvidia hardware.
Nvidia Chief Executive Jensen Huang has previously estimated that each gigawatt of AI computing capacity could eventually support between $40 billion and $50 billion in annual revenue, highlighting the scale of the opportunity companies see in AI infrastructure.
Beyond AI, SpaceX’s traditional launch business also continued to grow.
Revenue from commercial launches, government missions and Starship-related operations rose 29% from a year earlier. However, the segment continues to absorb substantial development costs as the company prioritizes deployment of its own Starlink satellites while simultaneously funding Starship, the reusable rocket system central to Musk’s long-term ambitions for deep-space transportation.
While SpaceX’s spending remains among the industry’s most aggressive, its rapidly growing cloud, satellite and AI businesses suggest the company is beginning to generate the commercial returns needed to justify one of the world’s richest corporate valuations.