Episode summary
Earnings Special: SpaceX Profit Beats Estimates on Big Jump in AI Revenue | Bloomberg Intelligence
Bloomberg Intelligence
· · 14 min · Hosts: Norah Mulinda, Alexis Christoforous · Guests: Ed Ludlow, George Ferguson
Summary
SpaceX reported a much stronger third quarter than expected, with revenue of about $14.58 billion versus estimates of $12.87 billion and net income of $4.4 billion versus $1.8 billion. The host and guests said the surprise came from better-than-expected profitability in both the connectivity business and the AI business, even as capital expenditures remained high at about $19.6 billion. They emphasized that the accounting treatment of those investments helps explain how the company can spend heavily and still post strong profit.
George Ferguson said Starlink appears to be gaining scale, with revenues rising without a similar jump in costs, which supports cash flow and profitability. The conversation also turned to SpaceX’s push into direct-to-cell and mobile services, where the company has been buying spectrum and terrestrial assets to broaden coverage. The host noted that the market is still waiting for a clearer business model for SpaceX mobile.
Both guests framed Starship as the key long-term catalyst. They said orbital data centers, future generations of Starlink, and direct-to-cell ambitions all depend on Starship becoming a rapidly reusable, economically viable launch system. The merger chatter between Tesla and SpaceX remained unresolved, with the host saying the market expects the question to keep coming up.
Key takeaways
- The host said SpaceX’s third-quarter revenue and net income both beat estimates by a wide margin, with profit the biggest surprise.
- George Ferguson said Starlink is showing economies of scale, with revenue growth outpacing costs and supporting cash flow.
- The guests said SpaceX’s direct-to-cell and mobile ambitions are still early, even after recent spectrum and terrestrial-asset purchases.
- George Ferguson said Starship matters more than Falcon 9 for the company’s future, especially for data centers in space and bigger constellation buildouts.
- The host said the Tesla-SpaceX merger question remains a market obsession, but there is still no clear answer from management.
Notable quotes
“We did see the third quarter revenue for SpaceX came in at about 14.58 billion, topping expectations of 12.87 billion”
“And then you scroll down and you're like net income $4.4 billion. Uh the estimate was for 1.8”
“there's more profitability uh that flowed through both the connectivity business and the AI business”
“it looks like there were some decent economies of scale inside Starlink”
“to me, the future of this business is Starship and not Falcon 9”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. — This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3,000 journalists and analysts around the world. — We did see the third quarter revenue for SpaceX came in at about 14.58 billion, topping expectations of 12.87 billion. We're seeing a bit of a reaction in the stock. talk to us about what you're taking away from what you're seeing thus far.
Yeah, I mean um well the net income number is a lot higher than we thought and a lot of people went into this print saying okay SpaceX has a very high capital expenditure story. Capital expenditures in the quarter came in at 19.6 billion which was pretty much in line 19.59 instead of 19.6. And then you scroll down and you're like net income $4.4 billion.
Uh the estimate was for 1.8. This is their first quarter. Again, they only had two quarters as a public company.
They're reporting for the second time, but they are reporting profit basically on an EPS basis. 35 cents a share ahead of the estimates 15 cents a share. Um, and you know, a lot of people ask me like a really simple question.
I'm not an accounting expert, by the way, nor am I an analyst. You know, I'm a reporter. But capital expenditures, a big bulk of that gets depreciated over a longer time horizon.
And that answers it's purely accounting how you could have capex at that level and still see them massively outperform on on net income um with revenues also outperforming on the top line against those different segments that they have AI connectivity in space.
What about um Tesla SpaceX the merger if I guess it's not if right it really is when at this point and I'm I'm wondering I don't I don't see any headlines regarding that.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- spacex earnings
- ai revenue growth
- satellite internet
- earnings estimates beat
- stock market reaction
Companies and tickers mentioned
- SpaceX
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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