SpaceX Faces First Earnings Report and Major Lockup Expiration

What happened

SpaceX reported its first quarterly earnings as a public company following its June 2025 IPO, the largest in U.S. history. The company's stock price had fallen to approximately $110 per share by early August, down 19% from the $135 IPO price and 51% from its intraday high of $225.64 reached on June 16. The company's market valuation declined from over $2 trillion at debut to approximately $1.4 trillion. Two days after the earnings release, on August 6, SpaceX's post-IPO lockup period expired, making 911 million insider-owned shares (held by approximately 20% of insiders) eligible for sale. This represented a significant increase compared to the 629 million shares (less than 5% of shares outstanding) sold during the IPO. Analysts projected the public float could triple overall through staggered unlocks extending into September. The company booked $18.7 billion in revenue in 2025 but reported a net loss exceeding $4.9 billion.

Why it matters

The convergence of SpaceX's first earnings report and lockup expiration created significant uncertainty for investors. The lockup expiration introduced substantial supply risk, with the potential release of shares worth approximately $100 billion at then-current prices. This supply overhang affected not only SpaceX but also peer space companies like Rocket Lab, whose shares declined 29.89% over the prior month despite strong operational performance. Investors focused on whether SpaceX's Starlink satellite network, described as the company's profit engine, could generate sufficient revenue and subscriber growth to offset massive capital spending on Starship development and xAI integration. The company's trailing price-to-sales ratio in the 70s, substantial quarterly cash burn, and debt load nearly double its cash position raised questions about valuation sustainability. Analysts expected $6.81 billion to $6.9 billion in second-quarter 2026 revenue, with Starlink connectivity driving results while space exploration and AI segments remained loss-making. Short sellers had already profited by more than $8 billion betting against the stock, though some anticipated short covering could provide support during the lockup expiration.

Bigger picture

SpaceX's performance carries implications for the broader space economy, which McKinsey projects will reach $1.8 trillion by 2035, up from $630 billion in 2023. The company's post-IPO struggles affected sentiment across the space sector, with companies like Rocket Lab experiencing significant stock declines despite operational improvements. Rocket Lab reported first-quarter fiscal 2026 revenue of $200.35 million (up 63.5% year-over-year), expanding backlog to $2.20 billion, and liquidity above $2 billion, yet its shares fell alongside SpaceX. The space industry encompasses both infrastructure applications (satellites, launchers) and reach applications that enable businesses like Uber through GPS and connectivity. SpaceX's ability to monetize its Starlink network (with analysts projecting 93% subscriber growth in 2026 compared to 229% in 2025), demonstrate progress on Starship commercial readiness, and validate its AI investments will influence investor confidence in the sector's growth trajectory. The company's SpaceXAI subsidiary, focused on orbital computing infrastructure and the Grok AI chatbot, faces scrutiny over whether revenue can justify the company's valuation, particularly following the proposed $60 billion acquisition of Cursor, an AI coding startup.

What to watch

Key signals include SpaceX's ability to demonstrate that Starlink revenue and subscriber growth, along with multibillion-dollar government contracts and cloud deals with companies like Anthropic and Google, can offset cash burn from Starship and xAI spending. Investors will monitor Starship's progress toward commercial readiness and payload delivery into orbit during the second half of 2026, as delays could increase launch costs and slow Starlink expansion. Management commentary on the SpaceXAI subsidiary's outlook, including AI cloud contract wins and data center spending, will be critical for addressing concerns about AI monetization and execution. The actual impact of the lockup expiration depends on whether insider shareholders sell or hold their newly tradable shares through the staggered unlock periods extending into September. Analysts will assess whether SpaceX can move closer to positive free cash flow and sustain its valuation given the current trailing price-to-sales ratio in the 70s. Sentiment may also depend on tone and vision set by Elon Musk during earnings calls, as investors are betting on long-term potential rather than near-term profitability. Analyst price targets range from $165 to $246, reflecting divergent views on execution risk and AI revenue potential.