SpaceX

A company approaching $31B of annualised revenue grew 92% and all but eliminated its operating loss in the same quarter - and the segment that was the largest cash sink a year ago just turned adjusted-EBITDA positive. Starlink is now a genuine profit machine, the compute business has found paying customers at scale, and a $100B cash position funds the build-out without an immediate return to the market.

• Growth accelerated at scale rather than decaying. Revenue rose 92% year over year to $7.814B, up from $4.694B just one quarter earlier. Very few companies at a $30B run-rate post triple-digit-adjacent growth, and it came from all three segments at once.
• Operating losses have nearly closed. The operating loss was $143M on $7.814B of revenue, versus $970M on $4.071B a year ago - a swing from -23.8% to -1.8% of revenue. Adjusted EBITDA of $3.538B was up 191%, a 45.3% margin.
• Starlink is a high-margin, compounding franchise. Connectivity delivered $4.291B of revenue (+66%), $1.656B of operating income (+79%) and a 38.6% operating margin, with subscribers doubling to 12.0M and a record 1.7M net additions in the quarter. The higher-value enterprise and government line grew 108% year over year to $1.806B - a mix shift toward the better revenue.
• The AI segment flipped from cash sink to contributor in two quarters. AI adjusted EBITDA came in at +$1.146B against ($609M) in the March quarter and ($276M) a year ago, as capacity was redirected from training in-house models to renting compute to outside customers - a change management described as carrying high incremental margins.
• Demand is contracted, not hoped for. The quarter added $14.1B of cloud services agreements (Anthropic and Google among the counterparties), with a further $6.7B under contract that begins ramping in October, plus more than $6B of multi-year Starshield awards from the US government. Total backlog stands at $47.5B.
• The balance sheet can fund the plan. $100.0B of cash and marketable securities against $39.4B of debt leaves roughly $60.6B of net cash, assembled from $85.7B of IPO proceeds and a $25B investment-grade bond issued in June at a 5.855% weighted average rate - long-dated money out to 2056 at pre-AI-boom pricing.
• Starship is clearing real technical gates, not slipping. Flight 12 in May achieved a precision landing of the upper stage; Flight 13 in July hit every objective, deploying 20 production V3 satellites, relighting a Raptor engine in space, and returning an intact heatshield - the specific milestone that rapid reusability depends on. Flight 14, targeted for late August, attempts the first operational V3 deployment plus an upper-stage catch.
• The direct-to-cell position is becoming hard to attack. FCC approval of the EchoStar transfer brings 65 MHz of US spectrum plus global mobile satellite licences, layered on top of new agreements with American Airlines, Southwest, Virgin Atlantic, Iberia and Aer Lingus, and carrier partnerships with SoftBank, NTT Docomo and Spark NZ.

The improving income statement and the cash reality are moving in opposite directions. Capital spending hit 235% of revenue, free cash flow was around -$25B for the half, and the narrowed loss is flattered by depreciation that has not yet arrived. Meanwhile the launch business the company is named for is shrinking and losing money, Starlink's price per subscriber is falling, and capital is being committed through an unusually related web of counterparties - all against a valuation near 56 times the annualised run-rate.

• The spending is the story, and it is accelerating. Capex was $18.369B in a single quarter - 235% of revenue, and roughly 40% above what analysts modelled. Management guided the next two quarters to be 'very similar', which points to something near $65B for the full year against roughly $30B of revenue. The 13% one-day drop after the print was a verdict on exactly this.
• Free cash flow is deeply negative and the reported loss understates the burn. First-half operating cash flow of $3.466B against $28.476B of capex implies roughly -$25.0B of free cash flow, about -200% of first-half revenue. A $541M net loss and a $25B cash outflow describe the same three months.
• A depreciation wave is queued behind the current numbers. Depreciation and amortisation was $2.848B in the quarter, already up 87% year over year, while net property, plant and equipment grew $23.1B in six months to $65.736B. Much of that capital is not yet in service; as it is placed in service, the charge steps up against revenue that has to grow into it.
• The launch business is now the smallest, shrinking and least profitable segment. First-half Space revenue of $1.581B was down from $1.611B a year earlier, on 78 launches versus 84 and 1,041 metric tons to orbit versus 1,102. Its first-half operating loss widened to $1.204B from $439M. Launch is 12% of revenue and getting smaller.
• Starlink's growth is being bought at a lower price. ARPU is $66 per month, flat sequentially and down 22% from $85 a year ago. Subscribers doubled while Connectivity revenue grew 66% - the gap is the discount required to add the next cohort, and it compounds as the base shifts to cheaper tiers and geographies.
• AI revenue is concentrated and its durability is untested. Of $2.561B in AI revenue, $2.194B is solutions and infrastructure driven by a handful of very large compute tenants. Advertising, the older and more diversified line, actually declined year over year to $367M from $426M. Two quarters of compute-rental revenue is not yet a proven annuity, and these customers are building their own capacity.
• Capital is being committed through related parties at very large scale. The balance sheet carries $13.3B of related-party debt with $327M of related-party interest expense in the quarter alone. On top of that sit a $60B agreement to acquire Cursor - roughly 7.7 times the entire quarter's revenue, expected to close in the third quarter - and the $16.8B first phase of the Terafab chip plant announced jointly with Tesla on August 6, a project SpaceX's own IPO filing described as a non-binding general framework that either party may walk away from. Total Terafab phases have been indicated at up to $119B.
• The valuation leaves no room for a stumble. At the August 7 close of $133.11, the roughly $1.75T market capitalisation is about 56 times the annualised June-quarter revenue, for a business that is still loss-making at the operating line, has two quarters of public reporting history, and is guiding to spend more cash in the next six months than it will earn in revenue.