On Aug. 4, Space Exploration Technologies (SPCX +6.14%), better known as SpaceX, released its first earnings report since its June 12 debut (the largest initial public offering in stock market history). It was a good top-line performance from SpaceX, with revenue growing 92% year over year to $7.8 billion.
Starlink carried most of the weight, bringing in nearly $4.3 billion, but all three of SpaceX's segments -- space, connectivity, and AI -- showed growth. Despite the revenue growth, SpaceX's stock dropped around 11% in pre-market trading, largely due to these two red flags worth keeping an eye on.
NASDAQ: SPCX
Key Data Points
SpaceX is spending a lot of money
Almost all major tech companies have been spending tons to keep up during the current AI boom, and SpaceX is joining the bunch. In the second quarter, SpaceX's capital expenditures (capex) were $18.4 billion -- a 550% increase year over year and up 82% from Q1.
Of the $18.4 billion, $15.8 billion was spent on its AI segment, building out data centers to increase its compute capacity. On one hand, spending a lot on building out infrastructure isn't inherently bad. CEO Elon Musk believes SpaceX is "building AI compute capacity at scale faster than anyone else."
On the other hand, $18.4 billion is a lot to spend on capex when you're only bringing in $7.8 billion in revenue. It was much more than analysts had expected. And as we've seen with other major spenders (like the "Magnificent Seven" stocks), investors haven't been kind to companies spending a lot without direct, clear monetization.
Image source: The Motley Fool.
SpaceX will likely operate at a loss for a while
In Q2, SpaceX had a net loss of $541 million, which was an improvement from the $1 billion it lost in Q2 2025, but still not great. For the first six months of this year, its net loss was $4.8 billion, well above its $1.5 billion in net losses in the first six months of last year.
SpaceX's connectivity segment (Starlink) was its only business that made a profit, with $1.7 billion in operating income (profit from core operations). Its space segment lost $542 million, and its AI segment lost $1.3 billion. Starlink will subsidize the other two businesses for the foreseeable future, which is perfectly fine, but it's worth keeping an eye on how long these losses continue, especially with the high capex not expected to slow down.
SpaceX finished Q2 with $100 billion of cash, cash equivalents, and marketable securities, so it doesn't necessarily have to panic over cash burn right now. But as an investor, you still have time to wait and see how it plays out before rushing to invest.
