Space Exploration Technologies Corp.

What they do

The company operates three reportable segments: Space (reusable rockets and launch services), Connectivity (Starlink broadband network with over 10,200 satellites serving 167 countries), and AI (a platform including the Grok frontier model, X social platform, and AI compute infrastructure). It launches customer payloads, deploys its own Starlink satellites, and provides enterprise and government connectivity and AI solutions.

Revenue drivers

• Connectivity — Largest segment with Q2 2026 revenue of $4.291B (55% of total), driven by Starlink subscriber growth (doubled YoY) and enterprise/government contracts.
• AI — Second-largest segment at $2.561B in Q2 (33% of total), from AI compute agreements and enterprise AI solutions; segment Adjusted EBITDA turned positive at $1.146B.
• Space — Generated $962M in Q2 (12% of total) from launch services ($648M) and launch & development ($314M), supported by 38 total launches (10 customer, 28 internal).

Recent performance

For Q2 2026, total revenue was $7.814B, up 92% year-over-year from $4.071B. Net loss improved to $541M from $1.0B, and Adjusted EBITDA rose 191% to $3.5B. Connectivity segment income from operations was $1.656B, while Space and AI segments reported operating losses of $542M and $1.257B respectively. The company held $93.52B in cash and equivalents on its balance sheet and reported $47.5B in backlog.

Strategy

Management is focused on scaling Starship for full and rapid reusability, having completed two Starship V3 flight tests in the past 90 days. It is expanding Starlink's subscriber base and enterprise/government contracts, including over $6B in multi-year U.S. government Starshield awards. The AI segment is investing heavily in compute infrastructure (AI capex of $15.828B in Q2) and released Grok 4.5 in July. The company announced a $60B stock acquisition of Cursor (Anysphere) to accelerate its AI enterprise opportunity, expected to close in Q3 2026.

Risks

• Heavy AI capex strain — AI segment capital expenditures of $15.828B in Q2 2026 alone create significant cash flow demands and risk of lower returns if AI compute agreements fail to materialize.
• Starship development costs — Space segment R&D was $1.076B in Q2, and the segment remains Adjusted EBITDA negative at -$205M, with no guarantee of near-term profitability from Starship.
• Cursor integration risk — The $60B all-stock acquisition of Cursor, a private software company, may face regulatory hurdles and integration challenges that could distract from core operations.
• Government contract concentration — Over $6B in recent Starshield awards and a significant portion of Connectivity revenue depend on U.S. government contracts, which are subject to budget changes and policy shifts.

Outlook

Management expects the Cursor merger to close in Q3 2026 and highlights accelerating revenue growth across all segments and strong backlog of $47.5B. It plans to continue investing in Starship, Starlink satellite production, and AI infrastructure while maintaining a disciplined capital allocation framework. No forward revenue or profit guidance was provided.