SpaceX Reports First Earnings Post-IPO: Revenue Soars 92% but Shares Fall

SpaceX Beats Market Expectations with Earnings

Shares Rise During Day, Fall After Hours

Concerns Over Rising AI Costs Weigh on Stock

US and Korean Space-Related ETFs Rally

SpaceX, the space company led by Elon Musk, posted revenue that exceeded market expectations in its first earnings release since its public listing, driven by the rapid growth of its Starlink and artificial intelligence (AI) businesses. However, the company continued to report losses due to massive investment in AI infrastructure, and its share price fell in after-hours trading. Nevertheless, space-related exchange-traded funds (ETFs) listed in South Korea and the United States succeeded in rebounding.

According to the Wall Street Journal (WSJ) and the Financial Times (FT) on August 4 (local time), SpaceX announced that its revenue for the second quarter of this year reached 7.814 billion dollars (approximately 11 trillion won), up 92% compared to the same period last year. This figure far surpasses the market estimate of 6.82 billion dollars. Net loss was recorded at 541 million dollars, less than the anticipated 2.12 billion dollars. However, quarterly capital expenditures reached 18.4 billion dollars, placing a burden on the company’s profitability.

Following the earnings release, SpaceX shares, which initially rose, fell by as much as 8% in after-hours trading before paring losses to close down around 4%. In its initial public offering (IPO) last June, SpaceX raised 86 billion dollars. The offering price was 135 dollars per share, and right after listing, the company’s share price exceeded 225 dollars. However, shares have since dropped below the initial offering price, and the company’s market capitalization has declined by more than 1 trillion dollars from its peak.

Satellite communications, SpaceX’s largest business, saw revenue rise by 66% to 4.3 billion dollars. It was the only one of SpaceX’s three business segments to deliver operating profit. The doubling in Starlink subscribers was the key driver of this growth, with Starlink’s subscriber base reaching 12 million in the second quarter.

The AI division reported revenue of 2.6 billion dollars, an increase of more than threefold year-over-year. Contracts to lease data center capacity and computing resources to external AI companies, such as Anthropic and Google, fueled this revenue surge.

However, the expansion of the AI business came with enormous costs. Capital expenditures related to AI reached 15.8 billion dollars in the second quarter, accounting for about 86% of total capex. Meanwhile, revenue in the space segment was 962 million dollars, up 29% year-on-year. Concerns about further increases in AI-related costs negatively impacted the share price.

It is believed that factors other than earnings also contributed to the share price decline. Deutsche Bank analyzed that the expiration of the employee stock lock-up period and smaller-than-expected passive fund inflows following SpaceX's Nasdaq 100 inclusion weighed on the stock. The sharp increase in short selling also put downward pressure on the shares. According to financial data provider S3 Partners, outstanding short interest in SpaceX amounted to approximately 220 million shares, about 34% of shares available in the market.

Meanwhile, the rebound in shares of space-related companies such as Rocket Lab and EchoStar helped propel space-related ETFs upward. Among U.S. ETFs, the 'Baron First Principles (RONB) ETF,' which has the highest weighting in SpaceX, finished up 3.76%. Other major SpaceX-weighted ETFs also posted strong gains: 'Roundhill Space And Technology (MARS)' rose 7.86%, 'ARK Space & Defense Innovation (ARKX)' rose 5.10%, and the leading U.S.-listed space ETF 'Procure Space (UFO)' gained 4.66%.

Returns were even sharper among leveraged ETFs offering double exposure. The 'Leverage Shares 2X Long SPCX Daily (SPCH)' ETF jumped 19.82%. 'Defiance Daily Target 2X Long SPCX (SPCU)' rose 20.00%, while 'ProShares Ultra SpaceX (SPCF)' gained 20.06%.

Even before SpaceX’s earnings release, domestic aerospace ETFs in South Korea were trending upward. 'ACE US Space Tech Active,' which allocates 27.82% of its holdings to SpaceX, closed up 7.96% from the previous day. Other ETFs heavily weighted with SpaceX also posted high returns: 'TIGER US Space Tech' (8.84%), 'SOL US Aerospace TOP10' (8.05%), and 'KODEX US Aerospace' (8.74%). The 'KIWOOM US Space Tech TOP2 Bond Mixed 50' ETF, which includes bonds and therefore had a more limited rise, also increased by 5.25%. Due to the nature of foreign stock-based ETFs, asset gains tend to be reflected with a lag, but as of 9:40 a.m. that day, gains of 3–5% were still being recorded.

After initially surging above its IPO price of 135 dollars per share, SpaceX’s stock has since fallen below that level. As of the 5th, the one-month returns for domestic space ETFs, which mushroomed amid high expectations for SpaceX, have dropped as much as -30%. Individual investors have also been moving out through net selling. In the past month, retail investors sold 28.8 billion won worth of TIGER US Space Tech, ranking 12th in net sales among individual investors.

Hyuntae Kim, head of Global Quantitative Investment at Korea Investment Management, commented, “The overwhelming revenue growth of SpaceX driven by Starlink shows no signs of slowing, and Starship commercialization will likely sustain this strong growth for the long term, further strengthening growth fundamentals. As satellite communications and other launch vehicle companies share the space infrastructure growth trajectory with SpaceX, and given the solid profit outlook despite recent share price adjustments, if the current risk-averse sentiment in the market recedes, it is reasonable to expect renewed strength in space-related stocks.”

This content was produced with the assistance of AI translation services.