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SpaceX Beats Q2 Earnings Estimates on AI Cloud and Starlink Growth
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Key Takeaways
SPCX narrowed its Q2 loss to 9 cents per share as revenue surged 91.9% to $7.81 billion.
AI revenue jumped 247.5% to $2.56 billion, aided by $1.60 billion in new cloud infrastructure sales.
Starlink subscribers doubled to 12 million as Connectivity revenue climbed 65.8% to $4.29 billion.
Space Exploration Technologies Corp. (SPCX - Free Report) reported a loss of 9 cents per share for the second quarter of 2026, 73.5% narrower year over year. The bottom line beat the Zacks Consensus Estimate of a 26-cent loss by 65.4%.
Revenue surged 91.9% to $7.81 billion and topped the $6.72 billion consensus by 16.3%, led by AI cloud services and Starlink expansion. Starlink subscribers doubled to 12 million, while nameplate compute reached 1.4 gigawatts.
Space Exploration Technologies Corp. Price, Consensus and EPS Surprise
All three operating segments posted year-over-year revenue gains. Connectivity remained the largest contributor, while AI recorded the fastest growth and Space benefited from a more favorable customer launch mix.
The revenue mix also shifted toward newer infrastructure services. AI generated nearly one-third of quarterly sales, supported by the initial ramp of cloud agreements. Recurring connectivity operations remained the company’s only segment-level source of operating income.
Connectivity Delivers Operating Leverage
Connectivity revenues climbed 65.8% year over year to $4.29 billion. Consumer revenues increased 44.4% to $2.49 billion, while Enterprise & Government revenues more than doubled to $1.81 billion on aviation wins and U.S. government demand.
The segment’s operating income rose 79.4% to $1.66 billion, lifting operating margin about 3 percentage points to 38.6%. Adjusted EBITDA soared 64.1% to $2.60 billion. Average revenue per user was $66, unchanged sequentially and down from $85 a year earlier. Management expects geographic expansion may pressure blended ARPU over time.
AI Cloud Deals Lift Profitability
AI revenues jumped 247.5% year over year and 213.1% sequentially to $2.56 billion. New cloud services agreements contributed $1.60 billion of incremental infrastructure revenue, while total contracted cloud sales reached $14.10 billion. Compute capacity increased from 1.0 gigawatt in the first quarter and 0.4 gigawatt a year earlier.
The segment posted adjusted EBITDA of $1.15 billion, reversing from a $276 million loss a year ago. Its operating loss narrowed 49.1% sequentially to $1.26 billion. The filings also noted customer concentration in AI revenues and said cloud agreements generally can be terminated on 90 days’ notice after initial ramp periods.
Starship Spending Pressures Space
Space revenues increased 29.0% year over year and 55.4% sequentially to $962 million. The company completed 10 customer launches and 28 internal launches during the quarter, carrying 485 metric tons to orbit. First-half activity totaled 78 launches and 1,041 metric tons.
Higher Starship research and development spending kept the segment in the red. Space recorded an operating loss of $542 million and an adjusted EBITDA loss of $205 million. Management said Flight 13 met all objectives after quarter-end, supporting plans to deploy operational V3 Starlink satellites on upcoming Starship missions.
Capex Surge Reshapes Cash Deployment
Total costs and expenses rose 57.8% to $7.96 billion. Research and development spending increased 81.2% to $3.55 billion, reflecting investments across Starship, next-generation satellites and AI infrastructure. Still, the company reduced its consolidated operating loss to $143 million from $970 million and generated adjusted EBITDA of $3.54 billion.
Capital expenditures reached $18.37 billion, including $15.83 billion for AI. Six-month operating cash flow improved to $3.47 billion, but investing activities used $34.49 billion. Following $85.68 billion of IPO proceeds and a $25 billion bond offering, cash and marketable securities were $100.01 billion, with backlog at $47.46 billion.
SpaceX Sets Ambitious Year-End Targets
Management expects capital spending in each of the next two quarters to remain near the second-quarter level. The company targets more than 2 gigawatts of compute by year-end, with newly contracted cloud services worth $6.70 billion beginning to ramp in October over a six-month period.
SpaceX believes growth across cloud services, Cursor and its other businesses can support at least $100 billion in annualized revenue run rate by December. Management also expects V3 satellites to deliver a major capacity increase, while next-generation Starlink Mobile service is targeted to begin by the end of 2027.
Keysight Technologies, Inc. (KEYS - Free Report) is scheduled to release third-quarter fiscal 2026 earnings on Aug. 18. The Zacks Consensus Estimate for earnings is pegged at $2.46 per share, suggesting growth of 43.02% from the year-ago reported figure.
Keysight has a long-term earnings growth expectation of 19.44%. The company delivered an average earnings surprise of 9.46% in the last four reported quarters.
Analog Devices, Inc. (ADI - Free Report) is set to release third-quarter fiscal 2026 earnings Aug. 19. The Zacks Consensus Estimate for earnings is pegged at $3.33 per share, implying growth of 62.44% from the year-ago reported figure.
Analog Devices has a long-term earnings growth expectation of 31.04%. The company delivered an average earnings surprise of 5.48% in the last four reported quarters.
Applied Materials, Inc. (AMAT - Free Report) is scheduled to release third-quarter fiscal 2026 earnings on Aug. 13. The Zacks Consensus Estimate for earnings is pegged at $3.36 per share, suggesting growth of 35.48% from the year-ago reported figure.
Applied Materials has a long-term earnings growth expectation of 32.44%. The company delivered an average earnings surprise of 6.06% in the last four reported quarters.
View the Zacks #1 Rank List
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SpaceX Beats Q2 Earnings Estimates on AI Cloud and Starlink Growth
Key Takeaways
Space Exploration Technologies Corp. (SPCX - Free Report) reported a loss of 9 cents per share for the second quarter of 2026, 73.5% narrower year over year. The bottom line beat the Zacks Consensus Estimate of a 26-cent loss by 65.4%.
Revenue surged 91.9% to $7.81 billion and topped the $6.72 billion consensus by 16.3%, led by AI cloud services and Starlink expansion. Starlink subscribers doubled to 12 million, while nameplate compute reached 1.4 gigawatts.
Space Exploration Technologies Corp. Price, Consensus and EPS Surprise
Space Exploration Technologies Corp. price-consensus-eps-surprise-chart | Space Exploration Technologies Corp. Quote
SPCX Growth Broadens Across Segments
All three operating segments posted year-over-year revenue gains. Connectivity remained the largest contributor, while AI recorded the fastest growth and Space benefited from a more favorable customer launch mix.
The revenue mix also shifted toward newer infrastructure services. AI generated nearly one-third of quarterly sales, supported by the initial ramp of cloud agreements. Recurring connectivity operations remained the company’s only segment-level source of operating income.
Connectivity Delivers Operating Leverage
Connectivity revenues climbed 65.8% year over year to $4.29 billion. Consumer revenues increased 44.4% to $2.49 billion, while Enterprise & Government revenues more than doubled to $1.81 billion on aviation wins and U.S. government demand.
The segment’s operating income rose 79.4% to $1.66 billion, lifting operating margin about 3 percentage points to 38.6%. Adjusted EBITDA soared 64.1% to $2.60 billion. Average revenue per user was $66, unchanged sequentially and down from $85 a year earlier. Management expects geographic expansion may pressure blended ARPU over time.
AI Cloud Deals Lift Profitability
AI revenues jumped 247.5% year over year and 213.1% sequentially to $2.56 billion. New cloud services agreements contributed $1.60 billion of incremental infrastructure revenue, while total contracted cloud sales reached $14.10 billion. Compute capacity increased from 1.0 gigawatt in the first quarter and 0.4 gigawatt a year earlier.
The segment posted adjusted EBITDA of $1.15 billion, reversing from a $276 million loss a year ago. Its operating loss narrowed 49.1% sequentially to $1.26 billion. The filings also noted customer concentration in AI revenues and said cloud agreements generally can be terminated on 90 days’ notice after initial ramp periods.
Starship Spending Pressures Space
Space revenues increased 29.0% year over year and 55.4% sequentially to $962 million. The company completed 10 customer launches and 28 internal launches during the quarter, carrying 485 metric tons to orbit. First-half activity totaled 78 launches and 1,041 metric tons.
Higher Starship research and development spending kept the segment in the red. Space recorded an operating loss of $542 million and an adjusted EBITDA loss of $205 million. Management said Flight 13 met all objectives after quarter-end, supporting plans to deploy operational V3 Starlink satellites on upcoming Starship missions.
Capex Surge Reshapes Cash Deployment
Total costs and expenses rose 57.8% to $7.96 billion. Research and development spending increased 81.2% to $3.55 billion, reflecting investments across Starship, next-generation satellites and AI infrastructure. Still, the company reduced its consolidated operating loss to $143 million from $970 million and generated adjusted EBITDA of $3.54 billion.
Capital expenditures reached $18.37 billion, including $15.83 billion for AI. Six-month operating cash flow improved to $3.47 billion, but investing activities used $34.49 billion. Following $85.68 billion of IPO proceeds and a $25 billion bond offering, cash and marketable securities were $100.01 billion, with backlog at $47.46 billion.
SpaceX Sets Ambitious Year-End Targets
Management expects capital spending in each of the next two quarters to remain near the second-quarter level. The company targets more than 2 gigawatts of compute by year-end, with newly contracted cloud services worth $6.70 billion beginning to ramp in October over a six-month period.
SpaceX believes growth across cloud services, Cursor and its other businesses can support at least $100 billion in annualized revenue run rate by December. Management also expects V3 satellites to deliver a major capacity increase, while next-generation Starlink Mobile service is targeted to begin by the end of 2027.
Zacks Rank
SpaceX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Keysight Technologies, Inc. (KEYS - Free Report) is scheduled to release third-quarter fiscal 2026 earnings on Aug. 18. The Zacks Consensus Estimate for earnings is pegged at $2.46 per share, suggesting growth of 43.02% from the year-ago reported figure.
Keysight has a long-term earnings growth expectation of 19.44%. The company delivered an average earnings surprise of 9.46% in the last four reported quarters.
Analog Devices, Inc. (ADI - Free Report) is set to release third-quarter fiscal 2026 earnings Aug. 19. The Zacks Consensus Estimate for earnings is pegged at $3.33 per share, implying growth of 62.44% from the year-ago reported figure.
Analog Devices has a long-term earnings growth expectation of 31.04%. The company delivered an average earnings surprise of 5.48% in the last four reported quarters.
Applied Materials, Inc. (AMAT - Free Report) is scheduled to release third-quarter fiscal 2026 earnings on Aug. 13. The Zacks Consensus Estimate for earnings is pegged at $3.36 per share, suggesting growth of 35.48% from the year-ago reported figure.
Applied Materials has a long-term earnings growth expectation of 32.44%. The company delivered an average earnings surprise of 6.06% in the last four reported quarters.