As SpaceX unveiled its first-ever quarterly earnings report since its historic IPO, founder and CEO Elon Musk ambitiously proclaimed that the rocket maker’s expectation of hitting $1 trillion in annual revenue could be reached by 2030 or even earlier.
The tech leader’s company, which began trading on the US stock market in June and briefly turned him into the world’s first trillionaire, posted 92% revenue growth to $7.8 billion compared to $4.1 billion a year ago.
However, SpaceX’s earnings were offset by its spending, which rose more than 550% to $18.3 billion. A massive portion of those capital expenditures – $15.83 billion – was allocated to investments in artificial intelligence.
Despite rockets being the company’s core business, its space segment posted a $542 million net loss against $962 million in revenue for the second quarter. The maximum contribution of $4.3 bn to the business came from Starlink.
Here are the key takeaways from the SpaceX quarterly earnings report revealed Tuesday (US time).
Revenue vs expenditures: SpaceX report
Despite SpaceX’s expenditures outweighing its revenue in the second quarter, the company still managed to post a better-than-expected result.
According to StreetAccount, SpaceX was expected to earn $835 million in revenue for the space segment, but it ultimately landed on an even better spot with $962 million in earnings.
Its connectivity segment, which includes the Starlink satellite internet service, brought in $4.29 billion in revenue compared to the expected $3.83 billion. During the earnings call with investors and other professionals, Elon Musk even praised the potential of the company’s internet service.
“It’s not out of the question that, at some point, Starlink will deliver a majority of the world’s internet, at least in countries where we are allowed to operate, which is the vast majority of countries,” Musk said. He added that he thinks this can happen in “less than 10 years.”
Meanwhile, the AI side generated $2.56 billion in revenue, contrary to the expected $2.18 billion.
As already established, the space unit, which is the company’s primary business, reported an operating loss of $542 million, while the AI unit ended up losing $1.26 billion.
Conversely, connectivity was profitable, with an operating income of $1.66 billion for the period.
Ad revenue, on the other hand, fell 14% in the quarter from a year earlier.
SpaceX CFO Bret Johnsen also said that the rocket maker is on track to reach $100 billion in annualised recurring revenue by the end of the year despite its capital spending expected to continue at a ‘very similar’ level fo rest of the year.
SpaceX-Nvidia partnership
With Elon Musk and Jensen Huang already being longtime friends, their companies SpaceX and Nvidia have announced a partnership on orbital data centres. Both billionaires’ firms are set to collaborate on “space compute” design.
Announcing the big reveal in a social media post, SpaceX wrote, “The companies will work “to design the Starmind AI1 satellite compute payload,” adding that each satellite “will include NVIDIA Rubin GPUs and Vera CPUs for datacenter-class space compute.”
Musk further told shareholders during the earnings call’s opening remarks that his company will be building its AI data centres in the future exclusively using chips manufactured by Nvidia.
Musk’s goals for ‘Moon Robots’
The billionaire SpaceX chief executive, who has displayed a streak of unveiling ambitious plans for the rocket maker, mused moon-based robots could be deployed to boost manufacturing on Earth’s natural satellite.
Although admitting that it all sounded “totally nuts,” Musk claimed that the vision, if implemented, could help the company to scale to a thousand times the economy of the planet, as reported by Fortune.
“It sounds super sci-fi right now, but it’s going to happen,” he said.