SpaceX Q2 2026 Earnings: Starlink Nearly Pays for the AI Bet, While $18.4B of Capex Outruns Revenue 2.4 to 1

SpaceX's first quarter as a public company is the cleanest look yet at what the largest IPO in history actually bought. Revenue grew 92% to $7.81 billion. Connectivity — Starlink — earned $1.66 billion of operating income, almost exactly enough to cover the AI segment's $1.26 billion loss and Space's $542 million loss, leaving a consolidated operating loss of just $143 million and a net loss of $541 million — an eighth of the $4.28 billion SpaceX lost in Q1. And in the same three months SpaceX spent $18.4 billion on capital equipment — 2.4 times its revenue, 86% of it in AI. The $85.7 billion the IPO raised in June did not sit on the balance sheet for long: it is visibly turning into data centers.

The Headline Numbers​

This is the first quarter SpaceX reported on a Form 10-Q. The comparison column is the same quarter of 2025, taken from the same filing.

Two numbers in this table point in opposite directions, and the quarter is the tension between them. The income statement is converging: gross margin jumped 11.4 points, the operating loss shrank by $827 million, and against Q1 2026 — when SpaceX lost $4.28 billion — the net loss improved by $3.7 billion in a single quarter. The cash-flow side is diverging: capex rose sixfold year over year and 82% sequentially, from $10.1 billion in Q1 to $18.4 billion in Q2. The operating loss is small because revenue finally arrived in the AI segment. The capex is enormous because SpaceX is building the capacity to sell more of it.

Below operating income, the quarter was quieter than Q1. Interest expense was $629 million (of which $327 million was owed to a related party), interest income rose to $340 million from $98 million as IPO and bond proceeds were parked in cash equivalents and marketable securities, and other expense was a modest $86 million — against the $1.88 billion of other expense that sank Q1. Tax was $23 million.

Revenue Deep Dive: The AI Segment Starts Selling Compute​

The release's framing is growth everywhere: SpaceX says it delivered "revenue growth of 92% year-over-year across Space, Connectivity and AI", and the CFO commentary adds that "Revenue growth accelerated across all our business segments." That is literally true — all three segments grew — but the segment table shows how unequal the acceleration was.

AI ($2.56B, +247%): The segment that lost $6.4 billion in FY2025 more than tripled its revenue in a year, and the growth came from one line. Advertising revenue — essentially X — actually fell 14%, from $426 million to $367 million. "AI solutions & infrastructure" revenue went from $311 million to $2,194 million. The release attributes the jump to "new Cloud Service Agreements", which "resulted in $1.6 billion in incremental AI infrastructure revenues for the second quarter", from contracts "totaling $14.1 billion in contracted sales". Nameplate compute reached 1.4 GW, up from 1.0 GW in Q1 and 0.4 GW a year earlier, "with significant incremental capacity under construction." SpaceX is, in other words, now renting out GPU capacity — the CoreWeave business model, inside a rocket company.

Connectivity ($4.29B, +66%): Starlink reached 12.0 million subscribers, double the 6.0 million of a year ago and 1.7 million more than in Q1. The release cites "strong Starlink subscriber growth" and says the company "Demonstrated traction across our enterprise business", pointing to airline wins (American, Southwest, Virgin Atlantic, Iberia, Aer Lingus) and over $6 billion of multi-year Starshield government awards. Enterprise & government revenue more than doubled (+108%) to $1.81 billion. The subscriber count is the volume story; the price story is below.

Space ($962M, +29%): Launch revenue grew on "a higher number of large customer launches" even though total launches fell from 46 to 38, and the segment's loss widened because its R&D — mostly Starship — rose to $1.08 billion from $693 million. The release says Starship V3 "continued to advance towards full and rapid reusability", with Flight 12 in May and Flight 13 in July. That is a product ramp in progress, not one yet showing in revenue.

The Margin Story​

The mechanics are simple. Revenue grew $3.74 billion year over year; cost of revenue grew only $1.21 billion, so gross profit grew $2.53 billion. R&D grew $1.59 billion (to $3.55 billion) and SG&A $306 million, so most of the gross-profit gain survived to the operating line. Sequentially, the swing is even starker: AI R&D actually fell slightly from Q1 ($2.18 billion versus $2.38 billion) while AI revenue tripled, which is why the AI operating loss halved from $2.47 billion to $1.26 billion.

Pricing did not contribute. Starlink ARPU was $66 a month, the same as Q1 and down from $85 a year earlier — a 22% decline, as the subscriber mix shifts toward cheaper consumer plans and more countries. The release describes this as "maintaining ARPU at $66, in line with Q1 2026." That is the full extent of its pricing language: nowhere does SpaceX claim rising selling prices, and in Connectivity the revenue growth is entirely volume. Consumer revenue grew 44% while subscribers doubled. Connectivity's 38.6% operating margin held anyway — up from 35.7% a year ago — because the constellation's cost base scales more slowly than its subscriber count.

The One Big Question: Does AI Revenue Grow Faster Than AI Capex?​

Our FY2025 analysis ended on exactly this question: the AI segment's revenue growth, not Starship's cadence, would settle whether the AI bet works. Q2 gives the first real data point, and it cuts both ways.

AI revenue grew 213% sequentially. AI capex grew 105% sequentially. On that narrow test, revenue won the quarter. But the absolute numbers are not close: SpaceX spent $15.8 billion on AI equipment to produce $2.6 billion of AI revenue. Six months of AI capex — $23.6 billion — already exceeds the whole of FY2025's company-wide capex of $20.7 billion.

Notice also what the release does not say. A company selling compute into the tightest hardware market in years could reasonably claim "demand exceeds supply" or that it is "capacity constrained". SpaceX does neither; its language is about capacity "under construction" and contracts signed. The $14.1 billion of contracted sales is the demand evidence, and contracted sales, by SpaceX's own definition, include only "the non-cancellable, enforceable period." The 10-Q's risk factors state the other side plainly: "if advancements in model efficiency or alternative architectures reduce demand for our infrastructure", the business could be adversely affected.

The balance sheet shows the quarter's two financings landing:

Two financings landed in June: the IPO (638.9 million Class A shares at $135, net proceeds $85,675 million) and a $25 billion inaugural investment-grade bond, part of which repaid the SpaceX bridge loan in full. The result is $100 billion of cash and marketable securities against $39.4 billion of debt. At Q2's capex pace, that cash pile is a little more than five quarters of spending — before operating cash flow, and before the Cursor deal.

Cursor is not on this balance sheet. SpaceX exercised its option in June and signed a merger agreement to acquire Anysphere, Inc. (Cursor) for an implied $60 billion, to be paid in Class A shares. The 10-Q says consummation is subject to closing conditions including regulatory approvals and is expected "during the third quarter of 2026". Nothing about it appears in the June 30 assets, goodwill or equity. When it closes, it will show up as roughly $60 billion of new equity and — almost certainly — a very large goodwill line. That is next quarter's ledger entry, not this one.

Tracking a $100 Billion Cash Pile in Plain Text​

Modeling a company in Beancount, the open-source double-entry accounting system, forces every dollar to reconcile — which matters most in a quarter like this one, where a capital-structure event and an operating result arrive at the same time. We keep SpaceX on the same ledger layout we use for how we model every company, in MUSD (millions of US dollars). The Beancount convention: Income accounts carry negative (credit) amounts, Expenses carry positive (debit) amounts, and Equity:Adjustments absorbs the net loss so the transaction sums to zero.

Here is the Q2 income statement exactly as it sits in the pushed ledger:

; Check: −7814 + 3495 + 3548 + 912 + 2 + 375 + 23 + (−541) = 0 ✓
 
2026-06-30 * "Space Exploration Technologies Corp" "FY2026 Q2 Income Statement"
  Income:Revenue                         -7814 MUSD  ; revenue earned (credit)
  Expenses:CostOfRevenue                   3495 MUSD  ; cost incurred (debit)
  Expenses:ResearchAndDevelopment          3548 MUSD  ; cost incurred (debit)
  Expenses:SellingGeneralAdministrative     912 MUSD  ; cost incurred (debit)
  Expenses:Restructuring                      2 MUSD  ; restructuring charges (debit)
  Expenses:OtherNet                         375 MUSD  ; net interest 289 + other expense 86 (debit)
  Expenses:IncomeTax                         23 MUSD  ; cost incurred (debit)
  Equity:Adjustments                       -541 MUSD  ; net loss offset (RE set by balance assertion)

The balance-sheet line that tells this quarter's story is the one that disappears. SpaceX's ledger has always carried an extra equity account, Equity:RedeemableConvertiblePreferredStock — the mezzanine equity from two decades of private funding rounds, which sits outside both liabilities and shareholders' equity. It held $20.9 billion at the end of 2024 and $38.8 billion at the end of 2025. Most of it converted in Q1 under the xAI merger, leaving $7.0 billion. At the IPO closing on June 15, 2026, the remaining 135 million preferred shares converted automatically into Class A and Class B common stock. Rather than let a padding entry quietly zero the account, the ledger records the conversion as its own transaction, straight from the 10-Q's statement of shareholders' equity:

2026-06-15 * "Space Exploration Technologies Corp" "IPO closing: redeemable convertible preferred converts to common stock"
  Equity:RedeemableConvertiblePreferredStock   7049 MUSD  ; mezzanine equity extinguished (135 shares)
  Equity:CommonStockAndAPIC                   -7049 MUSD  ; common stock 6 + APIC 7,043

Then the June 30 balance assertions check that the account is empty and that common equity absorbed the conversion, the IPO proceeds and the quarter's stock compensation:

; @m49-fragment balance-only
2026-03-31 balance Equity:RedeemableConvertiblePreferredStock -7049 MUSD  ; $7.0B, 135 shares outstanding
2026-06-30 balance Equity:RedeemableConvertiblePreferredStock 0 MUSD      ; converted at the IPO
2026-06-30 balance Equity:CommonStockAndAPIC                 -167357 MUSD ; 74,089 + SBC 877 + IPO 85,675 − 253 + 7,049 − 80

This is the "this company just went public" moment in accounting form. If the conversion had been assumed rather than modeled, the balance sheet would not tie: total assets of $192,770 million equal liabilities of $65,546 million plus zero mezzanine equity plus $127,224 million of shareholders' equity, and the ledger's audit checks exactly that at every period end.

The complete ledger — FY2024 and FY2025 from the S-1, the Q1 2026 pre-IPO quarter, and now the first public quarter — is open and auditable:

The Multi-Year Arc: From Private Company to Public AI Builder​

The arc compresses two very different trends into eighteen months. Net PP&E has tripled since the end of 2024, from $21 billion to $66 billion, and at the current pace will pass $100 billion within a few quarters. Meanwhile the preferred-stock account that financed SpaceX's private life went to zero, and cash went from $15.9 billion to $93.5 billion in one quarter. The quarterly revenue run rate — $7.8 billion, or roughly $31 billion annualized — is now well above FY2025's $18.7 billion. What has not yet happened is a quarter in which revenue growth pays for the spending: two quarters into 2026, SpaceX has spent $28.5 billion on capex against $12.5 billion of revenue.

The Verdict: Bull vs. Bear​

The Bull Case:

• The AI segment's revenue tripled sequentially to $2.56 billion and its operating loss halved to $1.26 billion; AI Adjusted EBITDA turned positive at $1.15 billion (non-GAAP). If AI revenue keeps outgrowing AI R&D, the segment reaches operating breakeven long before its capex slows.
• $14.1 billion of contracted sales from Cloud Services Agreements — non-cancellable periods only, by SpaceX's own definition — gives the compute buildout signed customers, not just forecasts.
• Connectivity is a 38.6%-margin business growing 66% with 12.0 million subscribers, double a year ago; on its own it produced $1.66 billion of operating income in a quarter, and its capex ($1.37 billion) is less than a third of its revenue.
• $100 billion of cash and marketable securities against $39.4 billion of debt means the buildout is funded for well over a year without new financing.
• Gross margin reached 55.3%, the highest in any period the ledger covers.

The Bear Case:

• $18.4 billion of capex against $7.8 billion of revenue: at this pace, the IPO cash lasts roughly five quarters before operating cash flow, and the depreciation it creates (D&A was already $2.85 billion this quarter, up 87%) will weigh on every future income statement.
• AI capex was 6.2× AI revenue. Nothing in the release claims demand exceeds supply or that compute is capacity-constrained — the language the Management signal scan looks for is simply absent, so the thesis rests on $14.1 billion of contracts, not on a sold-out market.
• Starlink ARPU fell 22% year over year to $66; the Connectivity story is volume at falling prices, and the release claims no pricing momentum.
• Advertising revenue — X — fell 14% year over year, so the AI segment's growth depends entirely on one new line of business less than a year old.
• The $60 billion Cursor acquisition will be paid in stock and is expected to close in Q3; it adds dilution and, almost certainly, a large goodwill balance to a company whose AI segment is not yet profitable.

Our Take: Q2 answers the question our FY2025 analysis left open more favorably than we expected: the AI segment can sell compute, and it sold enough in one quarter to cut the consolidated operating loss to $143 million. But it did not answer the harder question. SpaceX is spending $2.35 on equipment for every dollar of revenue, the market it sells into is described by management in terms of contracts rather than scarcity, and the $85.7 billion of IPO money is already being deployed at a pace that makes the next financing a matter of when, not whether. The ledger's own evidence says SpaceX is now a Starlink cash machine funding an AI infrastructure company — and the AI company is, for the first time, pulling part of its own weight. The number to watch in Q3 is not revenue growth; it is whether AI revenue growth stays ahead of AI capex growth once Cursor's goodwill lands on the balance sheet.