Key highlights:
- SpaceX reported revenue of $7.8 billion, beating Wall Street estimates
- The company also saw a sharp rise in its AI spending in the past quarter
- Shares fell 7% after the earnings report
SpaceX delivered a better-than-expected result in its first earnings report as a public company, but investors were not impressed.
The company’s shares fell by over 7% in after-hours trading after the report showed a spike in spending on AI projects. The revenue beat analyst estimates, and the losses were smaller than investors expected, but there is still a worry about the firm’s investment plans.
The earnings report comes weeks after its remarkable stock market debut. SpaceX raised billions in its IPO, and the stock spiked accordingly, making Elon Musk the world’s first trillionaire. However, the shares have since dropped by 40% from its ATH.
SpaceX beats earnings estimates but spending worries investors
The quarterly results were stronger than many analysts anticipated. The firm reported second-quarter revenue of $7.8 billion, ahead of the Bloomberg consensus estimate of $6.81 billion. Revenue also jumped from $4.7 billion in the first quarter.
The company posted adjusted EBITDA of $3.5 billion, beating the projected $2 billion.
Its quarterly loss also came in lower than forecast. The company reported a loss of $0.09 cents per share, much better than analysts’ expectations for a loss of $0.24 cents per share.
However, the firm’s spending was way more than its profits. Capital expenditures topped $18.4 billion during the quarter.
The number was close to expectations but higher than previous levels. AI operating losses came in at $1.26 billion, which was smaller than the forecasted $2.39 billion. Its spending on AI infrastructure practically doubled from $7.7 billion to $15.8 billion in Q1.
Elon Musk also said during the earnings call that the company’s AI execution is expected to improve in the coming months.
Additionally, the company shared it had entered a partnership with Nvidia to build its Starmind AI-1 satellite payload. Nvidia’s Rubin GPUs and Vera CPUs will be used to bring data center-level computing power into orbit. Musk added that Nvidia will be the exclusive supplier of AI chips for the company.
Starlink growth still strong despite market concerns
The company’s satellite internet business, Starlink, ended the second quarter with over 12 million subscribers. It generated adjusted EBITDA of $2.6 billion, above analysts’ estimate of $2.41 billion. Musk said on the earnings call, “Starlink will operate most of the world’s internet.”
The CEO also made another prediction on its future revenue. He said the annual revenue could hit $1 trillion by 2030:
“It’s probably also worth mentioning that our internal projections for reaching $1 trillion in revenue, not ARR, but revenue, have moved up from 2031 to 2030. There’s a non-zero chance of that being in 2029.”
The losses recorded are still a major subject of contention for investors. Tuesday’s report highlighted a quarterly net loss of $541 million.
Another concern is the lockup expiration set for August 6. Millions of insider shares will be available for sale on that day. This would increase the number of shares in the market. This could put additional pressure on a stock already struggling.
On a positive note, analysts surveyed by Bloomberg project its annual revenue to hit $38.6 billion in 2026.
Source:: SpaceX Stock Falls 7% Despite Smaller-Than-Expected Loss in First Public Earnings