SpaceX burns $25B in six months, testing Musk's short-seller warning

SpaceX burned roughly $25 billion in free cash flow in six months, undercutting Musk's short-seller warning.

"Their survival probability is very low," Chief Executive Elon Musk told short-sellers on X last month.

The company's first quarterly report since listing showed revenue up 92 percent year over year, Starlink subscriptions doubling and adjusted EBITDA nearly tripling. But operating cash flow of $3.5 billion in the first half of 2026 was dwarfed by $28.5 billion in capital expenditures, with another $3.9 billion of capex financed rather than paid in cash.

Shares of Space Exploration Technologies (SPCX) traded at $146.15, up 9.65 percent, giving the company a market cap of $1.9 trillion. The stock remains well below its 52-week high of $225.64, and nearly $6 billion of shares held by early investors and employees unlock over the next year, a potential overhang on the price.

One unnamed customer accounted for 19.5 percent of SpaceX's entire second-quarter revenue and the bulk of its AI revenue. The customer, widely believed to be Anthropic, the maker of Claude, leases computing capacity from SpaceX's xAI unit under a deal cancellable by either side with 90 days' notice after an initial ramping period. Musk previously clarified that one heavily touted lease was initially for just 180 days. The concentration matters because AI is where SpaceX is spending most heavily: $23.6 billion of its total capex went into AI alone.

Starlink remains SpaceX's best business, generating $4.3 billion of second-quarter revenue and $1.7 billion in operating income. But average revenue per user fell to $66 a month, little changed from the prior quarter yet down from $85 a year earlier. Subscriber growth has so far offset the decline, though further market capture in developed nations could accelerate the slide as growth slows.

The cash burn, customer concentration and falling ARPU give short-sellers ammunition even as top-line growth accelerates. Musk's forecast that AI revenue will eclipse the rest of the business by September depends on the unnamed customer renewing its lease, while Starlink's ARPU trend will determine whether subscriber growth can keep offsetting the decline. Investors will watch both in coming quarters.

This article is for informational purposes only and does not constitute investment advice.