Space Exploration Technologies Corp. Class A Common Stock 2026 Q2 Earnings Call

Good afternoon, everyone. Thank you for joining us today for SpaceX's second quarter 2026 earnings conference call. I'm Andrea Williams, Head of Investor Relations. Joining me today are Elon, Gwyn, and Bret, we are speaking to you from our facility in Bastrop, Texas. Our second quarter financial results were announced just after 3:00 P.M. Central Time, all relevant materials have been published to our investor relations website at ir.spacex.com. For this webcast, our prepared remarks will be followed by a question and answer session. We will take live Q&A from equity analysts then move to questions directly from our investors that were polled on our dedicated earnings Q&A platform. Thank you to everyone who submitted your questions in advance. During this webcast, we will discuss our business outlook and make forward-looking statements. These statements are based on our predictions and expectations as of today.

Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in our most recent filings with the SEC, including our final prospectus and today's published Form 10-Q. Additionally, during this call, we may discuss certain non-GAAP measures. In our press release and our filings with the SEC, you can find additional disclosures, including all reconciliations with comparable GAAP measures. For the second quarter of 2026, we announced the following financial results as compared to the prior year quarter. Revenues of $7.8 billion, up 92% from $4.1 billion, a quarterly net loss of $541 million, an improvement of $467 million, an adjusted EBITDA of $3.5 billion, up 191% from $1.2 billion. I will hand the call over to Elon for his opening remarks.

Thank you. It's been another milestone year for SpaceX so far. 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, we believe. We're significantly improving our AI models, most notably with the release of Grok 4.5 last month. I'll dive into each of those topics separately. With Starship, we completed two successful flights of Starship B3 in the past 90 days. Flight 13 demonstrated core capabilities necessary to achieve an orbital mission and return to Starbase for catch. On Flight 14 will be our first flight to fly our version 3 Starlink satellites, our communication satellites, to operational orbit.

We will try to actually catch the first and the second stage of Starlink V3 this year, we could possibly catch the ship as soon as the next flight. It's difficult to actually explain to most people just the incredible significance of Starship. I think perhaps describing it in terms of tonnage to orbit is a good way to appreciate the magnitude of the impact Starship will have on the future of civilization. Right now we deliver, call it, roughly 2,500 tons a year to orbit via Falcon. This is a big number by normal standards. The rest of the world, I think, delivers around 300 tons. We deliver 80%-90% of total Earth mass to orbit per year with Falcon.

With Starship, our aspirations, and I think we will achieve these aspirations, are to deliver well over 1 million tons to orbit per year, and probably ultimately 10 million tons per year. If you had a chart where you plotted things, you would need a very big table to put the chart on to even see any of our competitors on that chart and to make that. Our next biggest competitor was one pixel high on the bar chart. You would still need a very big bar chart to represent the SpaceX Starship vehicle. It's worth noting that we actually encourage our competitors to copy us. We do nothing to slow them down. We launch competing satellite constellations at fair prices, the same price we charge everyone.

We do encourage our competitors to copy us, it's quite difficult to copy something like Starship. We don't use patents as a sort of a landmine exercise to stop people from copying us. We actively encourage it. When you think about it on that, you go from 2,500 tons a year to 1 million, potentially 10 million tons per year, it's really a ridiculously profound difference. That is our plan, and I think we will achieve that plan. Regarding Starlink, it's also worth just noting that the Starlink V3 satellite is about an order of magnitude more capable than the Starlink V2 satellite, which was already a very capable satellite. We expect to launch about an order of magnitude more Starlink V3 satellites. That would mean a roughly two order of magnitude increase in the delivered bandwidth.

Even if our monetization per bit dropped by a factor of 10, that would still mean a 10X increase in the revenue of Starlink. I think people are really underestimating Starlink here. This is a big deal. It's kind of hard for people to wrap their minds around this, but 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're allowed to operate, which is the vast majority of countries. This is important to bear in mind, and it's not in the infinity future. It's less than 10 years. With the advent of AI, and humanoid robotics and vehicle robotics and just a massive number of robots, the appetite for bandwidth will be much greater than it has been in the past.

You think of a human consuming perhaps, or producing perhaps about a few hundred bits per second of output. Actually, the average human is outputting less than one bit per second over the course of a day, which is 86,400 seconds. Computers could easily do billions of bits per second continuously over a 24-hour period. This is why I would expect the appetite for bandwidth to grow dramatically with the growth of AI and robotics. Really, I think Starlink is the only thing that can actually service that bandwidth. Regarding AI, we're making rapid progress on Grok, because Grok 4.5 was a huge improvement. We have Grok 4.6 coming out probably next week, and then Grok 4.7 is about three or four weeks from today. We expect the cadence of AI development to improve dramatically.

With Grok 5, which should be out before the end of this year, we will be incorporating the entire corpus of SpaceX data. Basically, all the data that SpaceX has ever produced, which is a tremendous amount over the course of a quarter century, will be incorporated into Grok training. We think this will make Grok by far the best engineer. These are all very big things. In addition, of course, we are providing compute to others, and we are building and deploying compute, I think, faster. Our rate of growth certainly is faster than anyone else. Our efficiency of compute deployment, I think, is also the highest. We expect to end this year with over two gigawatts of compute. Probably our cumulative compute online by the end of next year will be several times higher.

It may, let's say, be closer to 10 gigawatts of compute than five gigawatts of compute, as a way to think about it. Going forward, we've decided to build exclusively on Nvidia, because we think the Vera Rubin architecture is the best architecture. We think it's the best AI computer, and we greatly value our close cooperation and partnership on many levels with Nvidia. We're exclusive to Nvidia. This new capacity coming online will obviously further benefit the development of Grok, as will our Cursor acquisition, which should close quite soon. I think we're through almost all of the regulatory hurdles. With respect to the Starmind AI satellite, which will be essentially an optimized Vera Rubin NVL72 computer. This is not some sort of far future distant thing. We expect to start launching these next year.

We think the design of the NVL72 VR computer is a much better design than, say, having a standard rack style design. We expect to actually deploy this on the ground as well as in orbit, because we think it's going to be a radical simplification of the normal NVL72 rack. It will cost less. It'll be more effective. If we're going to put it in space, why not put it on the ground? I think that's going to be pretty cool. In conclusion, the SpaceX team is solving some of the hardest engineering problems in the history of humanity. I think the team is succeeding because I think we've got, in a lot of ways, the smartest, most dedicated team of humans that has ever existed.

I'm incredibly proud to work with such a team, and I'd like to thank the team for their incredible hard work. Thank you to investors who have supported us along the way.

Thanks, Elon. We had an exceptional second quarter, and today I'll focus on the operational and commercial highlights, as well as the initiatives we are prioritized going forward. Starting with our space business, we remain the leading launch provider globally, with 78 total launches and 1,041 tons of mass to orbit delivered in the first half of this year, primarily allocated to our own internal Starlink missions, but with great customer missions as well. While our launch capabilities are key to supporting our connectivity business, we continue to have a very robust commercial manifest and a very robust and growing U.S. government mission demand, which drives revenue for the segment. We're currently launching at our highest Falcon cadence and are on the precipice of operationalizing Starship.

As Elon said, the first two flights of our V3 Starship vehicles put us in an excellent position to achieve our near-term goals of reaching orbit, catching and reusing the ships and boosters, and deploying our V3 Starlink broadband satellites. Speaking of which, Starlink had a standout quarter, driven by continued growth across our consumer, enterprise, and government businesses. During the second quarter, we added net more than 1.7 million Starlink subscribers globally, consumer. This reflects our best quarter of new customers to date, an increase from the 1.4 million we added during the first quarter. We achieved this by holding ARPU, which is the average revenue per user, stable at $66 per month compared to the first quarter.