SpaceX beats revenue expectations in first earnings report after IPO crash

SpaceX has reported a revenue surge of 92% to $7.81 billion in its first earnings report following its IPO crash, surpassing Wall Street expectations. The company, led by Elon Musk, disclosed a $541 million loss, a significant improvement from the $1 billion loss reported in the same quarter last year. Musk hailed the earnings as "another milestone year" for the company, praising the team for tackling some of the toughest engineering challenges in human history.

The tremendous revenue increase is expected to ease concerns among nervous investors who have been eagerly awaiting financial insight into the company's potential profitability. While SpaceX experienced a market-changing IPO in June, creating a $2 trillion company and briefly making Musk the world's first trillionaire, its stock price has declined by 24% since then, erasing nearly $500 billion in market cap.

Even with better-than-expected earnings, SpaceX's stock still fell by more than 8% in after-hours trading on Tuesday, likely due to the company's substantial capital expenditures.

Kathleen Brooks, a research director at global brokerage firm XTB, noted that the earnings report arrives at a critical time, as the share price has plummeted 50% from its peak and is currently trading below its IPO price. The report may determine the long-term direction of the stock, given the investors' apprehension.

SpaceX is a conglomerate of Musk's various businesses, such as satellite maker and internet service provider Starlink, artificial intelligence platform xAI, the social media company X, and the rocket business SpaceX. Last year, SpaceX generated $18.7 billion in revenue, recording an operating loss of $4.3 billion. The only profitable aspect of the company is its connectivity arm, Starlink. Comparatively, social media giant Meta generated over $200 billion in revenue last year with a net income of more than $60 billion.

Breaking down SpaceX's revenue by its three main businesses, the company reported $962 million for space, $4.29 billion for connectivity, and $2.56 billion for AI, exceeding analysts' forecasts of $835 million for space, $3.38 billion for connectivity, and $2.18 billion for AI. During the earnings call, Musk and SpaceX's president, Gwynne Shotwell, shared progress updates on launching massive Starship rockets into orbit, sending more Starlink satellites into space, and their ambitious goal to establish a moon colony, with a target of at least 2028.

SpaceX's earnings come just before more than 900 million lockup shares, previously inaccessible to the public, will be open for trading, potentially weakening the company's share price despite the positive earnings report.