SpaceX's first quarterly report as a public company delivered a 92% revenue jump to $7.8 billion and a $541 million net loss, yet the stock dropped 7% after hours as investors digested a $15.8 billion AI spending spree and a share lockup expiring Thursday that will more than double the tradable float.

The AI spend dwarfs everything else

The AI segment generated $2.6 billion in revenue, up 247% year over year, though management acknowledged almost all of it came from the merger and new cloud deals rather than organic growth. The unit burned $15.8 billion in capital expenditure, 86% of total company spend, and posted a $1.3 billion GAAP loss. Adjusted EBITDA showed a $1.1 billion profit, but only because the measure excludes the $1.9 billion depreciation charge on the very hardware being purchased. Management argued on the call that each dollar of compute investment pays for itself within a year, citing $6.7 billion in new cloud deals signed in early Q3.

Starlink carries the profit weight

Connectivity remains the cash engine. Starlink revenue reached $4.3 billion, 55% of the total, with operating income growing 79% to $1.7 billion, faster than revenue, a rare sign of operating leverage. Subscribers doubled to 12 million with 1.7 million net additions in the quarter. The trade-off: average revenue per user fell to $66 a month from $85 a year ago as lower-priced markets dragged down the blend. Enterprise and government revenue jumped 108% to $1.8 billion, including more than $6 billion in new Starshield contracts.

Launch is a richer mix, not a busier one

The space segment grew revenue 29% to $962 million despite fewer launches, 78 in the first half versus 84 a year earlier. The gain came from a higher-value customer mix. The segment lost $542 million on an operating basis and $205 million on adjusted EBITDA, driven by $1.1 billion in Starship R&D. Musk told analysts he considers the heat shield problem effectively solved.

The lockup is the near-term catalyst

Thursday's lockup expiration will release more than twice the current tradable supply in a single wave, with additional tranches unlocking over the coming months. The company ended the quarter with $100 billion in cash after the IPO and a $25 billion bond sale, so liquidity is not the issue. The question is whether the AI spend translates into returns before the share overhang finds a floor.