SpaceX Targets $100 Bn ARR Backed by AI, Starlink, Starship

SpaceX reported a strong second quarter, with revenue nearly doubling year-on-year to $7.8 billion, as growth across Starlink, launch services, and AI infrastructure helped narrow losses. 

The company posted a net loss of $541 million for the quarter ended June 30, compared with a loss of $1.0 billion a year earlier. Adjusted EBITDA rose 191% to $3.5 billion from $1.2 billion. 

The company ended the quarter with $100 billion in cash, cash equivalents, and marketable securities, along with a backlog of $47.5 billion.

Speaking during the earnings call, CEO Elon Musk outlined an aggressive roadmap spanning reusable rockets, satellite internet, and AI, arguing that all three businesses are reaching inflection points.

The space business reported revenue of $962 million, up 29% from the same period last year, helped by a higher number of customer launches. 

During the quarter, SpaceX completed Starship V3’s first suborbital mission and successfully carried out Flight 13, which deployed 20 production V3 satellites and demonstrated an in-space Raptor engine relight.

“We’re making great progress developing a fully and rapidly reusable reliable rocket with Starship. We're connecting millions more people globally across 170 markets with fast, reliable Starlink internet. We’re building AI compute capacity at scale faster than anyone else,” Musk said.

Musk said SpaceX completed two successful flights of its Starship V3 vehicle over the past 90 days, with Flight 13 validating capabilities required for orbital missions and booster recovery. Flight 14 will carry the first V3 Starlink satellites to operational orbit.

He described Starship as the company’s most significant long-term project, claiming it could increase payload capacity from roughly 2,500 tonnes annually with Falcon rockets to more than 1 million tonnes per year, with a long-term ambition of reaching 10 million tonnes.

Musk said Flight 13 performed better than expected and that SpaceX now considers the heat shield challenge largely solved.

“I would say that we do not see any technical obstacles at this point to achieving full and rapid reusability,” he said. The company expects to attempt catching the ship on the next flight, subject to regulatory approval, and aims to reach at least one Starship launch per day eventually.

Starlink Growth Accelerates

Starlink, SpaceX’s connectivity business, remained the company's largest revenue contributor, generating $4.29 billion, up 66% from a year earlier. Operating income for the segment increased 79% to $1.66 billion as Starlink subscribers doubled to 12 million. 

Enterprise and government revenue more than doubled YoY, supported by agreements with airlines and telecom operators, while Starshield secured more than $6 billion in multi-year US government contracts.

President and COO Gwynne Shotwell said Starlink added more than 1.7 million net subscribers during the quarter, its strongest customer addition to date, while maintaining average revenue per user at $66 per month. 

The network now operates in 167 markets with around 10,200 satellites in orbit, including 9,600 broadband satellites delivering roughly 800 TB per second of downlink capacity.

Musk argued investors underestimate Starlink’s long-term potential. The V3 satellites are about 10 times more capable than V2 satellites, and the company expects to launch roughly 10 times as many, increasing overall network bandwidth by around 100 times.

AI Business Scales Rapidly

AI emerged as the fastest-growing business during the quarter, climbing to $2.6 billion, up 247% year-on-year, helped by new cloud computing agreements and higher Grok and X subscription revenue. 

The company also turned positive on adjusted EBITDA for the AI segment while expanding compute capacity to 1.4 GW, up from 1 GW in the previous quarter. The company signed cloud services agreements worth $14.1 billion in contracted sales, contributing $1.6 billion in AI infrastructure revenue during the quarter.

SpaceX also announced that it was acquiring AI coding startup Cursor for $60 billion, with the transaction expected to close in the third quarter of 2026.

Following the quarter, it released Grok 4.5, which it described as its “largest and smartest model yet,” built for coding, agentic tasks and knowledge work. During the earnings call, Musk said Grok 4.6 is expected next week, followed by Grok 4.7 within weeks, while Grok 5 will launch before year-end.

The company has also standardised future AI infrastructure around NVIDIA’s Vera Rubin architecture.

CFO Bret Johnsen said SpaceX expects compute capacity to exceed 2 GW by year-end, while Musk later suggested total installed power and cooling infrastructure could approach 15 GW by the end of 2027 as the company prepares for further GPU deployments.

$100 Bn ARR Target

SpaceX spent $18.4 billion in capital expenditure during the quarter, including $15.8 billion on AI infrastructure. It also completed its IPO, raising $85.7 billion, followed by a $25 billion investment-grade bond offering, ending the quarter with $100 billion in cash and marketable securities and a $47.5 billion backlog.

The company expects to reach a $100 billion annualised revenue run rate by the end of the year, driven primarily by cloud computing services, Starlink expansion, and AI products.

“We’ve already contracted an additional $6.7 billion of cloud services revenue over a six-month period,” Johnsen said, adding that the company remains on track for “$100 billion of ARR... by the end of this year.”

Musk went further, saying internal projections have also accelerated.

“Our internal projections for reaching $1 trillion in revenue... have moved up from 2031 to 2030. There’s a non-zero chance of that being in 2029,” he said.