Aug 4 (Reuters) - SpaceX's revenue nearly doubled, the rocket company said in its first earnings report since going public, fueled by its booming Starlink satellite communications and AI businesses, but executives flagged the spending spree underpinning its lofty ambitions is far from over.
The company led by Elon Musk said it expected a $100 billion revenue run-rate by December, promised a less than one-year payback on new capital deployments for AI compute, and forecast it would launch at least 1,000 next-generation V3 Starlink satellites within a year. It also laid out plans to take on mobile phone providers.
The results for the quarter ended June 30 offered shareholders an early test of the investment case behind SpaceX's $1.75 trillion valuation: that profits from its fast-growing satellite internet business can fund an expensive push into AI, data centers and next-generation rockets until those ventures mature into significant businesses of their own.
While the company's AI unit showed signs of gaining commercial traction, management signaled that the spending required to build it remains enormous.
"We're building AI compute capacity at scale faster than anyone else, we believe, and we're significantly improving our AI models," Musk said on a post-earnings call.
The company reported April-June revenue of $7.8 billion, compared with $4.1 billion a year earlier, beating Wall Street expectations, according to LSEG data. Starlink revenue, which accounted for over half of total revenue, rose 66%, and revenue from SpaceX's AI business — which Musk has pitched as the company's future growth driver — surged about 250%.
But the company's capital expenditure ballooned to more than $18 billion from $2.83 billion a year earlier, and finance boss Bret Johnsen said he expected capital spending would be similar for the next couple of quarters. SpaceX sharply increased capital spending on AI, pouring in $15.83 billion in the second quarter, from $749 million a year earlier.
"The central question for SpaceX's first quarter as a public company was whether the machine underneath the story actually works, and on that question Elon Musk and his team delivered a few positives," said Thomas Monteiro, an analyst at Investing.com.
SpaceX shares fell 7.5% in after-hours trading after rising 9.4% during the day, ahead of the publication of results.
The company's stock has declined 8% since its record-breaking IPO in June. It could face additional pressure from the expiry of SpaceX's post-IPO lock-up period starting on Thursday, which may unleash a wave of insider and early-investor shares on the market.
STARLINK, CONNECTIVITY DRIVE SPACEX
Starlink and SpaceX's broader connectivity operations remain the company's primary financial engine, underpinning Musk's AI push. But critics have argued that the strategy of using Starlink's profits to bankroll the AI business and Starship launch operations until they can stand on their own is unsustainable.
Total operating losses narrowed in the second quarter to $143 million from $970 million. Operating losses in AI narrowed and operating income at Starlink swelled 79%.
"That's a tremendous upside surprise today alone, the fact that AI is already monetizing itself. They're not relying on Starlink to fund operations there. I think that's a huge part of the story," said Brian Mulberry, chief market strategist at Zacks Investment Management.
SpaceX President Gwynne Shotwell said she expected SpaceX to snatch "quite a few" of T-Mobile, AT&T and Verizon customers with the Starlink business, and aims to build out ground-based infrastructure to complement its satellite network for "a true mobile service." Shares in the telecom companies fell after hours.
Starlink, the company's satellite-internet unit, aided by a growing range of consumer, enterprise, aviation, maritime and government services, doubled subscribers to 12 million at the end of the quarter, but average revenue per subscriber slumped 22% from a year earlier as SpaceX entered more international markets and rolled out lower-priced plans.
SpaceX's AI business, which includes xAI, Grok, social media platform X, and a rapidly expanding data center operation, has been its biggest area of investment. The business is generating revenue from compute contracts with Anthropic, Alphabet's Google and Reflection AI, though a portion of its recurring revenue has yet to be recognized.
"SpaceX expects to have built more than two gigawatts of computing capacity this year and by the end of next year will have close to 10 gigawatts of computing," Musk said.
The company plans to use Nvidia hardware exclusively to build its data centers. Nvidia CEO Jensen Huang has said that each gigawatt of computing capacity generates roughly $40 billion to $50 billion of revenue for the company.
SPACE REVENUE JUMPS
Space revenue grew 29% year over year. The business, which includes commercial launches, government missions and development of Starship, remains a significant source of costs and uncertainty.
In recent years, SpaceX has increasingly prioritized launches for its own satellite network over third-party payloads, while continuing to absorb significant costs tied to Starship's development.
(Reporting by Akash Sriram in Bengaluru; Editing by Sriraj Kalluvila, Peter Henderson, Rod Nickel and Sonali Paul)
