SpaceX posts 92% revenue surge, but stock tumbles 7% in after-hours. Here's why

SpaceX released its first quarterly results after a stellar market debut earlier this year, with Elon Musk’s company reporting a 92% year-on-year surge in revenue to $7.8 billion for the April-June quarter. The stock, however, tumbled over 7% in the after-hours, spooking investors.

The newly-listed company said it expects a $100 billion revenue run-rate by December and plans to launch at least 1,000 next-generation V3 Starlink satellites within a year. Elon Musk’s company also promised a less than one-year payback on new capital deployments for AI compute

"We are building AI compute capacity at scale faster than anyone else, we believe, and we are significantly improving our AI models," Musk said during a post-earnings call.


Starlink revenue, which accounted for over half of the company’s total revenue, rose 66%, and revenue from SpaceX's AI business, which Musk has pitched as the company's future growth driver, surged about 250%.

Also read | SpaceX plans to turn Starlink into full-fledged mobile service, targets Verizon, AT&T and T-Mobile

SpaceX capex balloons to $18 billion

However, SpaceX’s capital expenditure ballooned to more than $18 billion from $2.83 billion a year earlier. The company’s CFO Bret Johnsen said he expected capital spending would be similar for the next couple of quarters. SpaceX sharply increased capital spending on AI, pouring in $15.83 billion in the second quarter, from $749 million a year ⁠earlier.

"The central question ‌for SpaceX's first quarter as a public company was whether the machine underneath the story actually works, and on that question Elon Musk and his team delivered a few positives," Reuters quoted Thomas Monteiro, an analyst at Investing, as saying.

SpaceX share price

SpaceX shares fell 7.5% in after-hours trading after the release of the results. Earlier in the day, the stock rallied more than 9%. After raising $75 billion in the biggest-ever IPO in history, SpaceX began trading at $150 per share in June, marking an 11% premium to its IPO price of $135. After listing, the shares of the company sharply surged more than 50% in just three sessions. The shares of the Elon Musk-led company have now fallen around 46% since then to a record low of $108.37 apiece.

The stock may see some more strong selling ahead after IPO lockup expirations, freeing up several shares for trade. As many as 911.5 million shares will become eligible for trade this month, potentially putting more pressure on the price, Bloomberg reported.

Also read | US stocks: SpaceX quarterly revenue surges in debut results on strong growth in its Starlink business

(With inputs from agencies)

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