As Satellite and AI Companies Grow, Spacex’s Income Soars in Its Debut Report

In its first earnings report since going public, SpaceX’s (SPCX.O) opens new tab revenue nearly doubled, driven by its burgeoning Starlink satellite communications and AI businesses. However, executives pointed out that the spending binge supporting its ambitious goals is far from over.

The Elon Musk-led corporation predicted it will launch at least 1,000 next-generation V3 Starlink satellites within a year, claimed a payback period of less than a year for new capital deployments for AI compute, and projected a $100 billion revenue run-rate by December. Plans to challenge mobile phone companies were also outlined.

The results for the quarter that ended on June 30 gave investors a preview of the investment case that underpins SpaceX’s $1.75 trillion valuation: that profits from its rapidly expanding satellite internet business can finance an expensive push into AI, data centers, and next-generation rockets until those endeavors grow into sizable businesses of their own.

Although the company’s AI division appeared to be getting economic traction, management indicated that significant investment is still needed to develop it.

According to LSEG data, the company surpassed Wall Street projections with April-June revenue of $7.8 billion, up from $4.1 billion a year earlier. Revenue from SpaceX’s AI division, which Musk has positioned as the company’s future growth engine, increased by roughly 250%, while Starlink revenue, which made up more than half of overall revenue, increased by 66%.

However, the company’s capital expenditures skyrocketed to almost $18 billion from $2.83 billion a year prior, and finance chief Bret Johnsen stated he anticipated that capital expenditures will remain comparable for the upcoming quarters. SpaceX spent $15.83 billion on AI in the second quarter, a significant rise from $749 million a year earlier.