SpaceX posts 92% rise in revenue in debut earnings report

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SpaceX surpassed analysts’ expectations in its debut earnings report on Tuesday, with Elon Musk’s rockets-to-AI business nearly doubling its quarterly revenues to almost $8bn.

The company posted $7.8bn in second-quarter revenues, well above analysts’ estimates of $6.82bn and up 92 per cent from a year earlier.

Shares in SpaceX were volatile in after-hours trading, dropping as much as 8 per cent, despite growth accelerating across all business segments. It posted a net loss of about $541mn, better than estimates of $2.12bn.

The company’s AI revenue more than trebled to $2.56bn, boosted by a series of deals to lease data centre capacity and computing power to rival AI groups including Anthropic and Google. Those deals added $1.6bn in revenue for the quarter but limited SpaceX’s capacity to train and run its own competitive AI models.  

While SpaceX is growing rapidly, its $1.65tn market capitalisation hinges on Musk achieving ambitious goals such as reaching Mars with reusable rockets, putting data centres into orbit and playing a critical role in developing AI.

On an earnings call on Tuesday, Musk said the company had made progress on its first generation of orbital data centres, dubbed Starmind AI-1. “This is not some sort of far-future, distant thing. We expect to start launching these next year,” he said. 

The group is also training its latest series of Grok AI models on SpaceX data, which Musk argued would give his company’s tools an edge in engineering, and is developing multiple gigawatts of new computing capacity, which could be leased to partners.

SpaceX would end this year with 2GW of capacity and next year with “closer to 10GW of compute than 5GW of compute”, said Musk. 

Musk also announced that he would rely exclusively on Nvidia hardware in future infrastructure development.

SpaceX raised a record $86bn in a record initial public offering in June with investors buying into a stock that tapped into the AI boom as well as the nascent space economy.

However, the shares have shed almost half their value, from a peak of $225 in the week after it went public, wiping more than $1tn from SpaceX’s market capitalisation. 

Some traders have also been betting against SpaceX shares. Short interest in the company has risen to the equivalent of 220mn shares or roughly 34 per cent of the shares that are freely trading, according to data provider S3 Partners. 

Analysts at Deutsche Bank said the end of the stock’s initial lock-up period for employees on Thursday was weighing on the company’s equity price. The German bank also said “lower than expected” buying by passive funds that track indices was affecting SpaceX’s shares after it was added to the Nasdaq 100 index last month. 

Investors are also weighing the probability of Musk merging SpaceX with Tesla after previously consolidating parts of his business empire.

Musk said the electric-car maker was increasingly collaborating with SpaceX, including through Terafab, a semiconductor manufacturing initiative, during Tesla’s earnings call last month. 

The SpaceX chief added that any merger would have to take place under the “appropriate process”.