SpaceX tops revenue expectations in first earnings report after IPO
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SpaceX exceeded revenue expectations and reduced its losses in its initial quarter as a publicly traded company, delivering sharp increases in all three of its divisions: space, connectivity and AI.
- The company's stock was down more than 8% in after-hours trading. During the trading day, the shares ended up 9.4%, at $125.33, as investors anticipated the earnings report.
Why it matters: SpaceX has been under the microscope — with shares falling below their IPO price of $135 — as investors look for Elon Musk to deliver AI advancements.
Driving the news: SpaceX's revenue soared 92%, to $7.81 billion, in the period ended June 30, compared with a year earlier, topping S&P Visible Alpha expectations of $6.9 billion. That included:
- $4.29 billion in its connectivity division, which includes the Starlink satellite internet service, up 66% from a year earlier.
- $2.56 billion in AI revenue, which includes xAI and Grok subscriptions, up 247%.
- $962 million in space revenue, up 29%.
Musk said on the earnings call that he now expects SpaceX to achieve $1 trillion in revenue in 2030, ahead of its previously projected 2031.
- "There's a non-zero chance of that being in 2029," he added.
Zoom in: SpaceX shares had been suffering in recent weeks amid concerns about an AI bubble. They remain below June's IPO and far below Wall Street's consensus target price of $293, according to S&P Visible Alpha.
- "The weakness has been partially driven by concerns about overgrowth around AI and data centers," according to Melissa Otto, head of Visible Alpha Research. "There is increasing concern in the market that AI infrastructure investments will not be able to generate a return in line with the level of cash needed."
Musk was characteristically bullish in his projections, saying that Starlink eventually "will deliver the majority of the world's internet, at least in countries where we're allowed to operate" and that SpaceX will have up to 10 gigawatts of computing power by the end of 2027.
- Gwynne Shotwell, the company's president, said SpaceX expects to land humans on the moon by 2028.
What to watch: How quickly SpaceX burns through its $100 billion stockpile of cash and marketable securities, plus how quickly it can fulfill its $47.5 billion order backlog.
- The company's net loss fell from $1 billion a year ago to $541 million in the period ended June 30.
- The company is projecting a 99% decline in the cost to orbit as it invests heavily in its Starship rocket program.
- "This financial strength gives us substantial capacity to invest in Starship, Starlink Broadband and Mobile satellites, and our AI platform, while maintaining a disciplined long-term capital allocation framework," SpaceX chief financial officer Bret Johnson said in a statement.
What's next: On the earnings call, Musk said that SpaceX would build out its infrastructure exclusively with Nvidia chips: "We've decided to build exclusively on Nvidia because we think the Vera Rubin is the best architecture. We think it's the best AI computer and we greatly value our close cooperation."
Editor's note: This story has been updated with additional details from the earnings conference call.
