SpaceX has reported a sharp rise in quarterly revenue, fuelled by strong demand for its Starlink satellite internet service and rapid growth in its artificial intelligence (AI) business.
The company's first earnings report since its stock market debut showed revenue almost doubled in the three months to June, although investors were concerned by a steep increase in spending on future projects.
Shares fell 7.5 per cent in after-hours trading following the results.
SpaceX reported revenue of $7.8 billion for the second quarter, up from $4.1 billion a year earlier and above analysts' expectations.
Starlink generated more than half of the company's total revenue, with sales rising 66 per cent as its customer base continued to expand around the world. The satellite internet service now has around 12 million subscribers, although average revenue per customer fell as the company introduced lower-priced plans in new markets.
SpaceX President Gwynne Shotwell said the company expects Starlink to compete more directly with traditional mobile operators.
She said SpaceX aims to win "quite a few" customers from T-Mobile, AT&T and Verizon by combining its satellite network with ground-based infrastructure to create "a true mobile service".
Artificial intelligence has become one of SpaceX's fastest-growing businesses.
Revenue from its AI division, which includes xAI, Grok and social media platform X, rose by around 250 per cent compared with a year ago.
"We're building AI compute capacity at scale faster than anyone else, we believe, and we're significantly improving our AI models," Elon Musk told investors.
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 per cent.
"That's a tremendous upside surprise today alone, the fact that AI is already monetising 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.
Despite the strong financial performance, SpaceX dramatically increased its investment in future growth.
Capital spending climbed to more than $18 billion during the quarter, driven largely by investment in AI infrastructure and the continued development of its Starship rocket programme.
Chief Financial Officer Bret Johnsen said spending is expected to remain at a similar level over the next two quarters.
The company also announced a partnership with Nvidia to supply chips for its planned Starmind AI1 orbital computing satellites.
Investors are also watching the upcoming expiry of SpaceX's post-IPO lock-up period, which could allow insiders and early investors to begin selling shares for the first time since the company's stock market listing in June.
At least 10 people were killed after two high-speed trains collided in Spain on Wednesday, forcing the suspension of services on a major rail route...
Despite losing his bloc's majority in Israel's 120-seat Knesset in a hotly contested election, Prime Minister Benjamin Netanyahu has manage...
The world's richest 0.1 per cent, just eight million people, produce more carbon emissions through their consumption than the poorest 3.5 billi...
Despite losing his bloc's majority in Israel's 120-seat Knesset in a hotly contested election, Prime Minister Benjamin Netanyahu has managed to remain in the lead after 70 per cent of votes were tallied on Wednesday. Figures are subject to change as counting continues.
Russia and Ukraine have begun a regional ceasefire to allow the start of a humanitarian effort in the Russian-occupied town of Oleshky, both sides said on Tuesday, but they continue strikes elsewhere, including the Ukrainian capital of Kyiv.
Russian strikes hit several parts of Ukraine overnight, injuring at least six people and targeting energy and port infrastructure, as President Volodymyr Zelenskyy said U.S. warnings about imminent Russian ballistic missile attacks had resumed.
Nearly two years after the 20 October 2024 parliamentary elections, Iraq’s Kurdistan Region remains without a cabinet. The Kurdistan Democratic Party (KDP) won 39 of 100 seats and the Patriotic Union of Kurdistan (PUK) 23, leaving neither able to govern alone.
The Pentagon is prepared to launch potentially major military operations against Iran within 96 hours of receiving an order from U.S. President Donald Trump, with sufficient forces already deployed in the Middle East, according to a CNN report.
NVIDIA CEO Jensen Huang has praised Kazakhstan’s AI ambitions, highlighting its potential to become a global hub for Physical AI, launch startups and transform industries.
Türkiye is preparing to sue Meta, owner of Facebook and Instagram, over age-inappropriate content on social media, Turkish Education Minister Yusuf Tekin has said.
A judge in the U.S. state of New Mexico has ordered Meta to pay $25 billion after a jury found the company misled consumers, in a case linked to the Cambridge Analytica scandal.
Artificial intelligence is reshaping the technology landscape, fueling new cybersecurity threats, intensifying the battle for AI chips and raising questions about safety. From autonomous hacking to SpaceX’s mobile ambitions, here are five key developments shaping the industry.
Japan has launched an uncrewed spacecraft on a mission to collect the first-ever samples from one of Mars’s moons and bring them back to Earth, in a bid to uncover clues about the origins of the solar system.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment