SpaceX's AB Side: Starlink Earns $18 Million Daily, AI Burns $170 Million Daily

SpaceX's first quarterly report shows extreme division: revenue surged 92% year-on-year to $7.8 billion, while AI's quarterly capital expenditure reached $15.8 billion, exceeding Nvidia's annual R&D budget. Musk is trying to balance the rapid profitability of Starlink, the aggressive expansion of AI, and the long-term R&D of Starship, three distinctly different business tensions. However, whether a single company can win all three battles remains an unanswered question in the market.

Written by: Yan Waizhi, Wall Street Insights

SpaceX's first quarterly financial report since its IPO presents a stark sense of division.

The financial report shows that SpaceX achieved revenue of $7.8 billion in the second quarter, a 92% increase from $4.1 billion in the same period last year; adjusted EBITDA reached $3.5 billion, far exceeding last year's $1.2 billion. However, SpaceX's capital expenditure in the second quarter was as high as $18.4 billion, 2.4 times its revenue for the same period, with AI-related capital expenditure alone reaching $15.8 billion, averaging over $17 million spent daily.

During the earnings call, Musk and CFO Bret Johnsen spent over an hour trying to reassure the market, explaining in detail the allocation and potential returns of the $18.4 billion capital expenditure. Although management emphasized that the massive investment in AI computing power could recover costs in a short time, the market was clearly not convinced by this long-term promise, leading to a more than 7% drop in SpaceX's stock price after hours.

Another key factor exacerbating market risk aversion is the impending wave of stock unlocks. On August 6, 9.1 billion shares of internal holdings will be unlocked, equivalent to 1.4 times the current circulating shares. Management lacked proactive communication regarding this liquidity shock during the call, only briefly responding during the Q&A session, further deepening investor uncertainty.

A Side: Starlink, Netting $18 Million Daily

Starlink's business generated $4.29 billion in revenue in the second quarter, a 66% year-on-year increase. Operating profit was $1.66 billion, up 79% year-on-year, with a profit margin of 38.6%. The user base increased by 1.7 million, reaching a total of 12 million, covering 167 countries. Revenue from enterprise and government sectors reached $1.8 billion, more than doubling year-on-year.

Figure 1: Comparison of Revenue and Operating Profit of SpaceX's Three Major Segments in Q2 FY2026 (Data Source: SpaceX SEC 8-K)

The U.S. government awarded contracts exceeding $6 billion in the second quarter. American Airlines signed an in-flight Wi-Fi agreement. President Gwynne Shotwell stated during the call that Starlink aims to become the fourth-largest operator in the U.S., following AT&T, Verizon, and T-Mobile. The combined annual revenue of these three companies is approximately $600 billion.

ARPU stabilized at $66. This figure was $85 in the second quarter of last year and also $66 in the first quarter of this year. The fastest user growth regions are Latin America, Africa, and Southeast Asia, where pricing is significantly lower than in North America, dragging down the average. However, a considerable portion of the new 1.7 million users also comes from aviation, maritime, and government clients, whose contract values are much higher than individual users.

Starlink's profit growth rate (79%) outpaces its revenue growth rate (66%), reflecting the effect of fixed cost dilution. Currently, there are over 10,200 satellites in orbit, with the V3 version broadband satellite having a downlink capacity of 1 Tbps, ten times that of V2. Shotwell mentioned that the launch of V3 satellites will not ramp up until mid-next year, at which point bandwidth will see a significant leap.

If we isolate Starlink, it is a telecom company with an annualized revenue of $17.2 billion and an operating profit of $6.6 billion for the second quarter. T-Mobile, the fourth-largest operator in the U.S., had a revenue of $81 billion last year and a profit of $13 billion. Starlink still has a long way to go to reach that scale, but its growth rate is not in the same league.

B Side: AI, Burning $17 Million Daily

AI business revenue was $2.56 billion, a 247% year-on-year increase and a 213% quarter-on-quarter increase. Cloud service agreements contributed approximately $1.6 billion, while AI solutions revenue jumped from $475 million in the first quarter to $2.194 billion.

Adjusted EBITDA turned positive for the first time, rising from a negative $609 million in the first quarter to a positive $1.146 billion. However, operating losses still amounted to $1.257 billion, excluding depreciation and amortization.

What truly makes the market anxious is the capital expenditure. The AI segment spent $15.8 billion in the second quarter. When compared to Nvidia's entire annual R&D budget ($12.9 billion) and Meta's total capital expenditure last year ($27.2 billion, including all businesses), SpaceX's quarterly investment in AI exceeded Nvidia's entire annual R&D budget and approached 60% of Meta's total annual expenditure.

Figure 2: SpaceX AI Segment Capital Expenditure vs. Revenue Trend (Data Source: SpaceX SEC filings)

This money is primarily being poured into the Colossus data center in Memphis, Tennessee. The nominal computing capacity at the end of the second quarter was 1.4 GW, with a year-end target of 2 GW. When asked about long-term plans during the call, Musk stated that the internal target is to reach 20 GW in terms of power and cooling by the end of 2027, and he personally believes the actual implementation will be around 15 GW. From 1.4 to 15, that's about a tenfold increase.

CFO Johnsen provided a figure during the call: the current investment recovery period for new computing power is less than a year. He stated that capital expenditures could almost be treated as operating expenses—meaning that based on the current customer contract prices and scale, the money invested today could be recouped within 12 months.

In the first three weeks of Q3, the company signed an additional $6.7 billion in incremental cloud contracts, with a service period of about six months, starting billing in October.

However, $15.8 billion is already spent money. The $6.7 billion is just a contract. During the call, multiple analysts pressed the same logic: you say the recovery period is less than a year, but you also spent $7.7 billion last quarter, totaling $23.5 billion over two quarters. When will we see corresponding returns on the profit and loss statement?

Management did not provide a specific timeline. Musk simply stated that by December, based on annualized calculations of monthly revenue, the company's recurring revenue would reach $100 billion. He added that the actual figure might be higher. The internal target for trillion-dollar revenue has been moved up from 2031 to 2030, with a 'non-zero probability' for 2029—his exact words.

The market is clearly not very interested in the long-term 'non-zero probability.' The more immediate question is: tomorrow (August 6), 9.1 billion shares of internal holdings will be unlocked, equivalent to 1.4 times the current circulating shares. Management did not proactively mention this during the call, only briefly responding when pressed during the Q&A session.

Starship is also still burning money

Launch business revenue was $962 million, a 29% year-on-year increase, but operating losses amounted to $542 million. The second quarter saw 38 launches completed. The main source of losses is Starship.

In the past 90 days, Starship V3 has completed two successful flights. The 13th flight validated the core capabilities of orbital missions and capturing the launch tower, while the 14th flight successfully placed the Starlink V3 satellites into operational orbit for the first time.

Musk described the heat shield issue as the biggest technical obstacle for Starship, claiming it has been resolved. The next step is to attempt to capture both the recovery booster and the spacecraft simultaneously in the next test flight at the end of this month.

R&D expenses increased by $389 million year-on-year, with the aerospace segment's adjusted EBITDA at negative $200 million. Musk's goal is to achieve at least one Starship launch per day within a year, reducing the cost of putting payloads into orbit to below 1% of traditional methods. His exact words were that if a bar chart were drawn of global payload tonnage to orbit, competitors' heights would only be a single pixel—provided that the chart could accommodate SpaceX itself.

Can Musk Win All Three Battles Simultaneously?

This quarterly report reveals three completely different tensions pulling against each other.

Starlink is profitable and making money quickly. The $1.66 billion operating profit corresponds to 12 million users. Shotwell stated the goal is to become the fourth-largest operator, ARPU has stabilized, and the V3 satellites have yet to start generating qualitative changes, with enterprise growth nearly double that of consumer growth. This is a good business that can be valued independently.

AI is spending aggressively. $15.8 billion in one quarter, with a theoretical recovery period of less than a year, and new contracts worth $6.7 billion signed in Q3. After the release of Grok 4.5, token consumption tripled, and the computing power leasing agreement with Anthropic amounts to $1.25 billion per month until 2029. All these signals point in the same direction: demand is real. However, accounting-wise, the $15.8 billion has already left the books, and the profit and loss statement has yet to catch up. This is the gap between what Johnsen described as 'like operating expenses' and what investors see as 'like a bottomless pit.'

Aerospace is caught in the middle. The technological progress of Starship is tangible—heat shield issues have been resolved, two successful flights, and V3 satellites have been placed into orbit—but the R&D bills are also very real. The return logic for this segment is the longest-term: only when the cost of putting payloads into orbit drops to 1% will everything improve.

Leveraging over 82% of the voting power he controls, Musk is trying to balance the rapid profitability of Starlink, the aggressive expansion of AI, and the long-term R&D of Starship, three distinctly different business tensions. However, whether a single company can win all three battles remains an unanswered question in the market.