SpaceX nearly doubled quarterly revenue and sharply reduced its operating loss, but investors focused on $18.4 billion of capital expenditure, continued negative cash flow and the expiration of its post-IPO lock-up period.
NEW YORK, August 5, 2026 — SpaceX shares fell sharply after the company published its first quarterly results since going public, as extraordinary revenue growth failed to overcome concerns about capital expenditure, cash consumption and valuation.
Second-quarter revenue increased 92% to $7.81 billion, comfortably exceeding the approximately $6.9 billion expected by analysts. The net loss narrowed to $541 million, from just over $1 billion one year earlier, while adjusted EBITDA almost tripled to $3.54 billion.
The operating loss declined even more dramatically, falling to $143 million from $970 million.
Despite these improvements, SpaceX shares lost around 12% during Wednesday’s session and fell below their $135 IPO price. Investors concentrated on the company’s $18.4 billion of quarterly capital expenditure, most of which was associated with artificial-intelligence infrastructure.
The end of the post-IPO lock-up period created an additional concern by making hundreds of millions of previously restricted shares eligible for sale.
SpaceX’s second-quarter results
| Metric | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Revenue | $7.81 billion | $4.07 billion | +92% |
| Operating loss | $143 million | $970 million | Improved by $827 million |
| Net loss | $541 million | $1.01 billion | Improved by $467 million |
| Adjusted EBITDA | $3.54 billion | $1.21 billion | +191% |
| Capital expenditure | $18.4 billion | — | Substantially higher |
| AI capital expenditure | $15.83 billion | $749 million | More than 20 times higher |
| Loss per share | $0.09 | — | Better than $0.26 expected |
The company generated revenue across three principal divisions: Connectivity, artificial intelligence and Space.
Starlink remains the economic foundation
SpaceX’s Connectivity division, which includes Starlink and secure government service Starshield, generated $4.29 billion of quarterly revenue.
The segment accounted for approximately 55% of total company revenue and remained SpaceX’s principal source of operating profit.
Connectivity revenue increased 66% from one year earlier, while operating income rose 79% to approximately $1.66 billion. That implies an operating margin of about 38.6%.
This profitability is especially important because SpaceX’s launch and AI operations continue to require substantial investment.
Starlink subscriptions reportedly doubled to approximately 12 million, supported by growing adoption among:
- Residential customers
- Companies operating in remote locations
- Airlines and maritime customers
- Mobile-network operators
- Governments and defence agencies
- Emergency and disaster-response organisations
The expansion is creating recurring subscription revenue, making Starlink financially different from the traditional rocket-launch business.
SpaceX also reported more than $6 billion of multi-year U.S. government contracts connected with Starshield and other secure satellite services. These contracts provide greater revenue visibility but also increase the importance of regulatory compliance and government relationships.
How much more can Starlink grow?
Starlink’s addressable market remains substantial. A large part of the world still lacks reliable high-speed internet, particularly in rural and geographically isolated regions.
Growth opportunities include direct-to-device connections, aviation, maritime connectivity, enterprise networks and government communications.
However, further expansion is capital-intensive. SpaceX must continually manufacture, launch and replace satellites while building ground stations and improving network capacity.
Low-Earth-orbit satellites have finite operating lives. Consequently, some investment is required simply to maintain the existing constellation rather than expand it.
Starlink also faces several risks:
- Increasing competition from other satellite networks
- National licensing restrictions
- Spectrum disputes
- Launch failures
- Congestion as subscriber numbers grow
- Pressure on consumer pricing
- Continuous satellite-replacement costs
The division’s high operating margin is encouraging, but investors will need to determine how much capital expenditure is required to preserve it.
AI becomes the fastest-growing division
SpaceX’s AI segment generated $2.56 billion of revenue, an increase of 247% from approximately $737 million one year earlier.
The division includes xAI, the Grok platform, X and an expanding portfolio of data-centre and cloud-computing services.
AI accounted for roughly one-third of total quarterly revenue. It was therefore no longer a minor experimental activity but a central part of the consolidated company.
SpaceX reported $14.1 billion of contracted cloud-services sales, along with an additional $6.7 billion of contracts secured after the end of the quarter.
Management also said AI deployments were producing relatively rapid returns and that daily use of its services continued to increase.
Adjusted EBITDA for the AI division reached approximately $1.15 billion, compared with a loss one year earlier. That improvement suggests that the computing infrastructure is already generating significant revenue.
The accounting picture is less flattering when depreciation and other operating costs are included. The segment still reported an operating loss of approximately $1.26 billion.
The difference between positive adjusted EBITDA and a substantial operating loss is critical.
Data centres require enormous upfront investments in graphics processors, servers, buildings, electricity infrastructure and cooling systems. Adjusted EBITDA excludes depreciation, meaning it does not reflect the gradual accounting cost of those assets.
For a capital-intensive AI business, EBITDA can therefore make profitability appear stronger than cash flow or operating income.
Capital expenditure reaches $18.4 billion
SpaceX spent approximately $18.4 billion on capital expenditure during the quarter, including roughly $15.83 billion on AI-related infrastructure.
That compares with AI capital expenditure of only $749 million in the corresponding period last year.
The spending was directed towards:
- Graphics-processing units
- Large-scale data centres
- Electrical and cooling infrastructure
- Network equipment
- Starlink satellites
- Launch systems
- Starship development
- Other production facilities
The figure was much larger than quarterly revenue and explains why the company remains deeply cash-flow negative despite reporting $3.54 billion of adjusted EBITDA.
Management expects capital expenditure to remain elevated over the next several quarters. SpaceX is competing with some of the world’s largest technology companies for chips, electricity, engineering talent and suitable data-centre locations.
The company also expects to receive a significant allocation of Nvidia’s most sought-after processors next year. That may support AI revenue growth, but it implies continued investment.
EBITDA is not the same as cash flow
SpaceX’s reported adjusted EBITDA margin was approximately 45%, which appears exceptionally strong:
$3.54 billion adjusted EBITDA ÷ $7.81 billion revenue = approximately 45%
However, that calculation should not be interpreted as a free-cash-flow margin.
Adjusted EBITDA excludes:
- Depreciation
- Amortisation
- Interest expense
- Taxes
- Stock-based compensation and selected adjustments
- Capital expenditure
For a conventional software company, the difference between EBITDA and free cash flow may be manageable. For SpaceX, which is building satellites, rockets, factories and data centres, it is enormous.
The company could therefore report rapidly rising EBITDA while continuing to consume cash.
SpaceX ended the quarter with a substantial liquidity position following its IPO and a $25 billion bond issue. Nevertheless, investors will closely monitor how quickly the cash balance declines if capital spending remains near current levels.
Losses improved—but the full picture is complicated
The quarterly net loss narrowed from $1.01 billion to $541 million, while the operating loss fell from $970 million to $143 million.
That represents meaningful progress.
Adjusted EBITDA rose faster than revenue, suggesting improved operating leverage before capital costs and other adjustments.
For the full first half, however, SpaceX reported a net loss of approximately $4.82 billion, compared with revenue of $12.51 billion. Research, development, financing expenses and the expansion of the AI business affected the six-month result.
Investors should therefore avoid extrapolating the improved second-quarter loss without considering the company’s acquisition, financing and investment activity during the full period.
The launch business remains loss-making
The core Space segment generated approximately $962 million of revenue, an increase of around 29%.
The division includes Falcon launches, Starship development, NASA missions, commercial satellite launches and national-security contracts.
Despite its growth, the segment produced an operating loss of approximately $542 million.
SpaceX benefits from a strong competitive position in launches because of reusable Falcon rockets, vertical integration and a high launch frequency. It has also secured significant U.S. government and military contracts.
However, Starship development remains expensive. Its eventual success could dramatically reduce launch costs and expand the company’s opportunities in satellite deployment, lunar missions and deeper-space exploration.
Until then, Starship represents a major investment with uncertain timing and technical risk.
Why the stock fell despite strong results
The negative reaction resulted from several factors rather than weak headline numbers.
Capital spending exceeded expectations
The $18.4 billion quarterly investment programme raised doubts about how much external funding SpaceX may require.
Free cash flow remained deeply negative
Positive adjusted EBITDA did not translate into positive cash generation because capital expenditure was so large.
Starlink is funding riskier projects
Investors are concerned that the profitable connectivity division may be used to subsidise AI infrastructure, Starship and other businesses for many years.
Expectations were already extremely high
The IPO valued SpaceX at approximately $1.75 trillion. At that valuation, investors were already assuming exceptional growth across Starlink, launches and AI.
The lock-up period was ending
More shares were about to become eligible for trading, creating the possibility of additional supply.
Investors wanted clearer returns from AI
AI revenue is growing rapidly, but the segment still records an operating loss and requires extraordinary capital expenditure.
The results were therefore good in absolute terms but insufficient to resolve the central debate about cash requirements and valuation.
Lock-up expiration increases the share supply
SpaceX completed its IPO in June at $135 per share. Employees, early investors and other insiders were prevented from selling certain holdings during the post-IPO lock-up period.
Restrictions covering more than 900 million shares were due to expire around August 6.
A lock-up expiration does not mean that every eligible shareholder will sell. It simply removes the contractual restriction preventing sales.
Nevertheless, even a small percentage of 900 million shares entering the market could create significant supply. Traders frequently reduce exposure before lock-up expirations because of this possibility.
The timing was especially unfavourable because it coincided with investor concern about capital expenditure.
Valuation remains difficult to justify using conventional measures
SpaceX’s June IPO valued the company at approximately $1.75 trillion. The shares briefly traded above the offer price but subsequently declined, with the latest fall taking them below $135.
Depending on the market price used, SpaceX’s equity value remained roughly in the $1.5 trillion to $1.7 trillion range.
That valuation is difficult to assess because SpaceX combines businesses with very different economics:
- A profitable satellite-subscription platform
- A capital-intensive launch company
- A rapidly expanding AI infrastructure operation
- A social-media platform
- Government and defence contracts
- Long-duration projects such as Starship
Using annualised second-quarter revenue of approximately $31 billion, the company traded at roughly 50 times current revenue near a $1.6 trillion valuation.
Management has discussed reaching an annualised revenue run rate of $100 billion by year-end. Even if that ambitious objective is achieved, the corresponding valuation would still equal approximately 16 times revenue.
Those multiples are considerably higher than those of most aerospace, telecommunications and infrastructure companies.
The valuation can only be justified if SpaceX delivers an unusual combination of:
- Sustained Starlink subscriber growth
- High connectivity margins
- Rapidly scaling AI revenue
- Improving AI economics
- Successful Starship development
- Lower launch costs
- Continued government-contract wins
- Eventual positive free cash flow
Any delay in these assumptions could lead to further valuation compression.
The bullish interpretation
Supporters can point to several genuine strengths.
Revenue nearly doubled and exceeded expectations. Starlink is profitable and growing rapidly. AI revenue more than tripled, while adjusted EBITDA improved significantly. Operating losses narrowed, and the company has a substantial backlog of government and cloud-service contracts.
SpaceX also possesses capabilities that are difficult to replicate:
- Reusable rockets
- A global satellite constellation
- Proprietary launch infrastructure
- Access to government missions
- Vertical integration
- Large-scale AI computing capacity
- A recognised engineering organisation
If capital expenditure produces rapid revenue growth and durable competitive advantages, the current cash burn may represent investment rather than structural weakness.
The bearish interpretation
The sceptical case begins with valuation and cash flow.
SpaceX is valued like a dominant software platform but spends capital like a combination of a telecommunications operator, semiconductor data centre and aerospace manufacturer.
Starlink’s profits are supporting businesses that remain loss-making and require continual funding. AI infrastructure may eventually produce attractive returns, but competition is intense and equipment can become obsolete quickly.
The lock-up expiration creates a near-term technical risk, while the long-term investment case depends heavily on execution across several exceptionally difficult industries.
A strong quarter does not eliminate those concerns.
What investors should monitor next
Free cash flow
This will be more important than adjusted EBITDA. Investors need evidence that capital expenditure can eventually decline relative to revenue.
Starlink operating margin
Connectivity is the economic foundation of the group. Margin deterioration would weaken the entire investment case.
AI capital efficiency
The market will want to see how much revenue and operating income each dollar of AI investment generates.
Capital-expenditure guidance
Spending of $18.4 billion per quarter would consume enormous financial resources if sustained.
Share sales after the lock-up
The number of shares actually sold by employees and early investors will affect near-term market supply.
Starship milestones
Successful tests and commercial deployment could materially reduce launch costs. Delays or failures would increase expenditure.
Debt and financing
Investors should monitor interest costs, bond issuance and any need for additional equity capital.
The bottom line
SpaceX’s first public earnings report demonstrated exceptional growth.
Revenue rose 92% to $7.81 billion, the operating loss narrowed to $143 million and adjusted EBITDA reached $3.54 billion. Starlink delivered strong revenue, operating profit and subscriber growth, while the AI division expanded far faster than expected.
The market reaction nevertheless reflects a legitimate concern: SpaceX spent $18.4 billion in one quarter and remains substantially cash-flow negative.
At a valuation still measured in the trillions, beating quarterly revenue estimates is not enough. Investors need evidence that the company can translate Starlink’s profitability and AI growth into sustainable free cash flow without continually raising capital.
The results strengthened the operational case for SpaceX. They did not resolve the valuation and funding debate—and the expiration of the IPO lock-up made that debate more urgent.
Financial information relates to the quarter ended June 30, 2026. Market prices may change rapidly. This article is for informational purposes and does not constitute investment advice.
