10-Q – 2026-08-04 – spcx-20260630.htm

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NM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.
Revenue
Revenue for the three months ended June 30, 2026 increased $216 million, or 29.0%, compared to the three months ended June 30, 2025. This increase was primarily driven by an increase in Launch Services revenue of $158 million and an increase in Launch and Development revenue of $58 million due to an increase in customer launches period over period from 9 for the three months ended June 30, 2025 to 10 for the three months ended June 30, 2026, and a favorable customer mix shift.
Revenue for the six months ended June 30, 2026 decreased by $30 million, or 1.9%, compared to the six months ended June 30, 2025. This decrease was primarily driven by a decrease in customer launches period over period from 21 for the six months ended June 30, 2025 to 17 for the six months ended June 30, 2026. Launch Services revenue decreased by $78 million, partially offset by an increase in Launch and Development revenue of $48 million primarily due to timing of work performed on government contracts.
Cost of Revenue
Cost of revenue for the three months ended June 30, 2026 was flat compared to the three months ended June 30, 2025. This was primarily driven by higher customer and launch overhead costs of $42 million, offset by a decrease in production related costs of $43 million
Cost of revenue for the six months ended June 30, 2026 decreased by $17 million, or 2.7%, compared to the six months ended June 30, 2025. This decrease was primarily due to a decrease in customer launches and timing of work on government contracts of $21 million.
Research and Development
Research and development for the three months ended June 30, 2026 increased by $383 million, or 55.3%, compared to the three months ended June 30, 2025. This increase was primarily driven by higher production and engineering costs of $311 million and higher launch and test costs of $73 million to support continued development of the Starship vehicle.
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Research and development for the six months ended June 30, 2026 increased by $787 million, or 64.6%, compared to the six months ended June 30, 2025. This increase was primarily driven by higher production and engineering costs of $653 million and higher launch and test costs of $134 million to support continued development of the Starship vehicle.
Selling, General, and Administrative
Selling, general, and administrative for the three months ended June 30, 2026 increased by $12 million, or 13.8%, compared to the three months ended June 30, 2025. This increase was primarily due to higher general corporate and travel expenses.
Selling, general, and administrative for the six months ended June 30, 2026 decreased by $6 million, or 3.4%, compared to the six months ended June 30, 2025. This decrease was primarily due to lower allocated general and administrative overhead of $30 million, partially offset by an increase in our general corporate and travel expenses of $16 million.
Loss from Operations
Space loss from operations for the three and six months ended June 30, 2026 increased by $173 million, or 46.9%, and $765 million, or 174.3%, respectively, compared to the prior periods driven by the factors described above.
Connectivity

Three Months Ended
June 30, 2026 vs. 2025 Change Six Months Ended
June 30, 2026 vs. 2025 Change
(in millions) 2026 2025 $ Change % Change 2026 2025 $ Change % Change
Revenue
$ 4,291  $ 2,588  $ 1,703  65.8  % $ 7,548  $ 5,062  $ 2,486  49.1  %
Costs and expenses
Cost of revenue 2,060  1,401  659  47.0  % 3,711  2,615  1,096  41.9  %
Research and development 294  143  151  105.6  % 499  266  233  87.6  %
Selling, general, and administrative 281  121  160  132.2  % 494  225  269  119.6  %

Total costs and expenses $ 2,635  $ 1,665  $ 970  58.3  % $ 4,704  $ 3,106  $ 1,598  51.4  %
Income from operations $ 1,656  $ 923  $ 733  79.4  % $ 2,844  $ 1,956  $ 888  45.4  %

Revenue
Revenue for the three months ended June 30, 2026 increased by $1,703 million, or 65.8%, compared to the three months ended June 30, 2025. This increase was primarily driven by an increase of $764 million in revenue from our consumer subscribers, composed of 101.2% growth in Starlink subscribers, offset by a 22.4% decline in Starlink subscriber ARPU, primarily due to international expansion and the addition of lower priced service plans, as well as an increase of $939 million in our government, aviation, maritime, and other enterprise businesses.
Revenue for the six months ended June 30, 2026 increased by $2,486 million, or 49.1%, compared to the six months ended June 30, 2025. This increase was primarily driven by an increase of $1,420 million in revenue from our consumer subscribers, composed of 101.2% growth in Starlink subscribers, offset by a 22.6% decline in Starlink subscriber ARPU, primarily due to international expansion and the addition of lower priced service plans, as well as an increase of $1,066 million in our government, aviation, maritime, and other enterprise businesses.
Cost of Revenue
Cost of revenue for the three months ended June 30, 2026 increased by $659 million, or 47.0%, compared to the three months ended June 30, 2025. This increase was due to (i) higher depreciation of $226 million primarily from capitalized launch and satellite costs, (ii) higher operating expenses of $158 million mainly driven by customer support and installation costs of $50 million, ground operating costs of $44 million, and payment processor fees of $17 million, and (iii) an increase in Starlink Kit production spend of $148 million to support our Connectivity revenue growth.
Cost of revenue for the six months ended June 30, 2026 increased by $1,096 million, or 41.9%, compared to the six months ended June 30, 2025. This increase was due to (i) higher depreciation of $503 million primarily from capitalized launch and satellite costs, (ii) higher operating expenses of $295 million mainly driven by customer support and installation costs of $89 million, ground operating costs of $88 million, payment processor fees of $35 million and engineering costs of $30 million, and (iii) an increase in Starlink Kit production spend of $219 million to support our Connectivity revenue growth.
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Research and Development
Research and development for the three months ended June 30, 2026 increased by $151 million, or 105.6%, compared to the three months ended June 30, 2025. This increase was primarily due to increased spend on our next-generation development of satellites of $90 million, ground equipment of $28 million, and Starlink Kits of $18 million.
Research and development for the six months ended June 30, 2026 increased by $233 million, or 87.6%, compared to the six months ended June 30, 2025. This increase was primarily due to increased spend on our next-generation development of satellites of $152 million, ground equipment of $42 million, and Starlink Kits of $25 million.
Selling, General, and Administrative
Selling, general, and administrative for the three months ended June 30, 2026 increased by $160 million, or 132.2%, compared to the three months ended June 30, 2025. This increase was primarily driven by higher marketing costs of $111 million, higher international expansion costs of $16 million, and higher sales and property taxes of $15 million, partially offset by lower bad debt expense of $13 million.
Selling, general, and administrative for the six months ended June 30, 2026 increased by $269 million, or 119.6%, compared to the six months ended June 30, 2025. This increase was primarily driven by higher marketing costs of $191 million, higher international expansion costs of $27 million, and higher sales and property taxes of $21 million, partially offset by lower bad debt expense of $21 million.
Income from Operations
Connectivity income from operations for the three and six months ended June 30, 2026 increased by $733 million, or 79.4%, and $888 million, or 45.4%, respectively, compared to the prior periods driven by the factors described above.
AI

Three Months Ended
June 30, 2026 vs. 2025 Change Six Months Ended
June 30, 2026 vs. 2025 Change
(in millions) 2026 2025 $ Change % Change 2026 2025 $ Change % Change
Revenue
$ 2,561  $ 737  $ 1,824  247.5  % $ 3,379  $ 1,465  $ 1,914  130.6  %
Costs and expenses
Cost of revenue 1,106  551  555  100.7  % 1,562  1,002  560  55.9  %
Research and development 2,178  1,122  1,056  94.1  % 4,557  2,030  2,527  124.5  %
Selling, general, and administrative 532  398  134  33.7  % 995  699  296  42.3  %
Restructuring charges 2  190  (188) (98.9) % (9) 194  (203) NM

Total costs and expenses $ 3,818  $ 2,261  $ 1,557  68.9  % $ 7,105  $ 3,925  $ 3,180  81.0  %
Loss from operations $ (1,257) $ (1,524) $ 267  (17.5) % $ (3,726) $ (2,460) $ (1,266) 51.5  %

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NM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.
Revenue
Revenue for the three months ended June 30, 2026 increased by $1,824 million, or 247.5%, compared to the three months ended June 30, 2025 due to the increase in AI solutions and infrastructure revenue of $1,883 million, partially offset by decrease in advertising revenue of $59 million. The increase in AI solutions and infrastructure was primarily due to an increase in AI infrastructure revenue of $1,600 million as we began to offer cloud services to customers and an increase in Grok and X subscription revenue of $258 million. The decrease in advertising revenue was due to the Company’s transition to a new advertising platform which impacted ad sales for a short period of time.
Revenue for the six months ended June 30, 2026 increased by $1,914 million, or 130.6%, compared to the six months ended June 30, 2025 due to the increase in AI solutions and infrastructure revenue of $2,074 million, partially offset by decrease in advertising revenue of $160 million. The increase in AI solutions and infrastructure was primarily due to an increase in AI infrastructure revenue of $1,600 million and an increase in Grok and X subscription revenue of $449 million. The decrease in advertising revenue was due to the Company’s transition to a new advertising platform which impacted ad sales for a short period of time.
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Cost of Revenue
Cost of revenue for the three months ended June 30, 2026 increased by $555 million, or 100.7%, compared to the three months ended June 30, 2025. This increase was primarily driven by an increase in infrastructure and cloud computing costs of $470 million due to more compute costs being allocated to cost of revenue as our AI infrastructure revenue increased, an increase in payment processor fees of $39 million, and an increase in revenue share and content creator fees of $35 million, partially offset by a decrease in employee compensation expenses (including salaries, benefits, and share-based compensation) of $19 million.
Cost of revenue for the six months ended June 30, 2026 increased by $560 million, or 55.9%, compared to the six months ended June 30, 2025. This increase was primarily driven by an increase in infrastructure and cloud computing costs of $386 million due to more costs being allocated to cost of revenue as our AI infrastructure revenue increased, an increase in revenue share and content creator fees of $105 million, and an increase in payment processor fees of $55 million, partially offset by a decrease in employee compensation expenses (including salaries, benefits, and share-based compensation) of $13 million.
Research and Development
Research and development for the three months ended June 30, 2026 increased by $1,056 million, or 94.1%, compared to the three months ended June 30, 2025. This increase was primarily due to higher infrastructure and cloud computing costs of $726 million and higher employee compensation expenses (including salaries, benefits, and share-based compensation) of $180 million associated with the continued build out of our compute infrastructure.
Research and development for the six months ended June 30, 2026 increased by $2,527 million, or 124.5%, compared to the six months ended June 30, 2025. This increase was primarily due to higher infrastructure and cloud computing costs of $1,742 million and higher employee compensation expenses (including salaries, benefits, and share-based compensation) of $449 million associated with the continued build out of our compute infrastructure.
Selling, General, and Administrative
Selling, general, and administrative for the three months ended June 30, 2026 increased by $134 million, or 33.7%, compared to the three months ended June 30, 2025. This increase was primarily due to higher employee compensation expenses (including salaries, benefits, and share-based compensation) of $177 million as we continue to expand our AI business, partially offset by a decrease in legal expenses of $64 million due to a dismissal of litigation against the Company.
Selling, general, and administrative for the six months ended June 30, 2026 increased by $296 million, or 42.3%, compared to the six months ended June 30, 2025. This increase was primarily due to higher employee compensation expenses (including salaries, benefits, and share-based compensation) of $325 million as we continue to expand our AI business, partially offset by a decrease in legal expenses of $64 million due to a dismissal of litigation against the Company.
Restructuring Charges (Credits)
Restructuring charges (credits) for the three and six months ended June 30, 2026 decreased by $188 million and $203 million, respectively, compared to the prior periods. This decrease was primarily due to a change in estimated settlement amounts in 2025 for former Twitter employees as part of the workforce reduction program implemented in 2022.
Loss from Operations
AI loss from operations for the three months ended June 30, 2026 decreased by $267 million, or 17.5%, compared to the three months ended June 30, 2025 driven by the factors described above.
AI loss from operations for the six months ended June 30, 2026 increased by $1,266 million, or 51.5%, compared to the six months ended June 30, 2025 driven by the factors described above.
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Non-GAAP Financial Measures
Management believes that certain financial measures that are not presented in accordance with GAAP provide management and investors with useful supplemental information that provides a meaningful view of our financial condition and results of operations across periods by removing the impact of items that management believes do not directly reflect our ongoing operating performance. Adjusted EBITDA and Segment Adjusted EBITDA are supplemental measures that are not required by or presented in accordance with GAAP. In evaluating our performance as measured by Adjusted EBITDA and Segment Adjusted EBITDA, management recognizes and considers the limitations of these measures. Other companies in our industry may calculate Adjusted EBITDA and Segment Adjusted EBITDA differently than we do or may not calculate them at all, limiting their usefulness as comparative measures. Because of these limitations, Adjusted EBITDA and Segment Adjusted EBITDA should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, or any other measure calculated in accordance with GAAP, and should be considered together with our GAAP financial measures and the reconciliations to the corresponding most directly comparable GAAP financial measures set forth in this Quarterly Report on Form 10-Q.
Adjusted EBITDA is defined as net income (loss) excluding (i) depreciation and amortization, (ii) share-based compensation, (iii) restructuring charges, (iv) impairments, (v) interest expense, (vi) interest income, (vii) other income (expense), net and (viii) provision for (benefit from) income taxes. Segment Adjusted EBITDA is defined as segment income (loss) from operations excluding (i) depreciation and amortization, (ii) share-based compensation, (iii) restructuring charges, and (iv) impairments. Adjusted EBITDA and Segment Adjusted EBITDA are key performance measures that our management uses to assess our financial performance as well as for internal planning and forecasting purposes. We consider Adjusted EBITDA and Segment Adjusted EBITDA to be meaningful performance measures for investors to evaluate our operating performance and to compare the financial results between periods.
The following table sets forth a reconciliation of Net loss, the most directly comparable GAAP measure, to Adjusted EBITDA:

Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 2026 2025
Net loss $ (541) $ (1,008) $ (4,817) $ (1,536)
Add (deduct):
Depreciation and amortization 2,848  1,526  5,290  2,970 
Share-based compensation 831  463  1,470  694 
Restructuring charges 2  190  (9) 194 
Impairments —  5  —  29 
Interest expense 629  411  1,293  858 
Interest income (340) (98) (553) (215)
Other income (expense), net 86  (413) 1,962  (202)
Provision for income taxes 23  138  29  152 
Adjusted EBITDA $ 3,538  $ 1,214  $ 4,665  $ 2,944 

The following table sets forth a reconciliation of Income (loss) from operations for each segment, the most directly comparable GAAP measure, to Segment Adjusted EBITDA:

Three Months Ended June 30,
2026
(in millions) Space Connectivity AI Total Reportable Segments
Income (loss) from operations $ (542) $ 1,656  $ (1,257) $ (143)
Add:
Depreciation and amortization 158  805  1,885  2,848 
Share-based compensation 179  136  516  831 
Restructuring charges —  —  2  2 

Segment Adjusted EBITDA $ (205) $ 2,597  $ 1,146  $ 3,538 

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Six Months Ended June 30,
2026
(in millions) Space Connectivity AI Total Reportable Segments
Income (loss) from operations $ (1,204) $ 2,844  $ (3,726) $ (2,086)
Add:
Depreciation and amortization 324  1,588  3,378  5,290 
Share-based compensation 324  252  894  1,470 
Restructuring charges —  —  (9) (9)

Segment Adjusted EBITDA $ (556) $ 4,684  $ 537  $ 4,665 

Three Months Ended June 30,
2025
(in millions) Space Connectivity AI Total Reportable Segments
Income (loss) from operations $ (369) $ 923  $ (1,524) $ (970)
Add:
Depreciation and amortization 146  569  811  1,526 
Share-based compensation 125  91  247  463 
Restructuring charges —  —  190  190 
Impairment 5  —  —  5 
Segment Adjusted EBITDA $ (93) $ 1,583  $ (276) $ 1,214 

Six Months Ended June 30,
2025
(in millions) Space Connectivity AI Total Reportable Segments
Income (loss) from operations $ (439) $ 1,956  $ (2,460) $ (943)
Add:
Depreciation and amortization 308  1,078  1,584  2,970 
Share-based compensation 233  166  295  694 
Restructuring charges —  —  194  194 
Impairment 29  —  —  29 
Segment Adjusted EBITDA $ 131  $ 3,200  $ (387) $ 2,944 

Liquidity and Capital Resources
Our primary sources of liquidity are cash flows generated from operations, our total cash and cash equivalents of $93,522 million as of June 30, 2026, short-term marketable securities of $6,487 million as of June 30, 2026, and borrowings under our credit facilities. As of June 30, 2026, we have $5,000 million available to borrow under the SpaceX Credit Facility. In June 2026, the Company completed its initial public offering (“IPO”), in which the Company issued and sold 638.9 million shares of its Class A common stock at a public offering price of $135.00 per share, including the full exercise of the underwriters’ over-allotment option, which resulted in net proceeds of $85,675 million after deducting the underwriting commissions and offering costs. In June 2026, the Company also raised $25,000 million in the SpaceX Notes, which was partially used to repay the SpaceX Bridge Loan in full.
In addition, because we expect a significant portion of our future expenditures to fund growth initiatives, we retain flexibility to adjust spending across segments. For example, if our near-term data center needs decrease in scale or ramp more slowly than expected, including due to global economic, tax, trade or business conditions, we may reduce future capital expenditures in this segment and reallocate those expenditures to other segments based on business priorities and growth opportunities. We may also from time to time determine that it is in our best interests to voluntarily repay certain indebtedness early.
Accordingly, we believe we have sufficient sources of funding to meet our business requirements for at least the next twelve months.
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Debt Agreements
As of June 30, 2026, we and our subsidiaries had outstanding $38,433 million in aggregate principal amount of indebtedness and no material debt principal payments are due until July 15, 2031 under SpaceX Notes. For details regarding our indebtedness, refer to Note 9, Debt of our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
SpaceX Notes
In June 2026, SpaceX issued senior unsecured notes with The Bank of New York Mellon Trust Company, N.A, as trustee, in an aggregate principal amount of $25,000 million (“SpaceX Notes”). The SpaceX Notes have five tranches maturing on July 15, 2031, July 15, 2033, July 15, 2036, July 15, 2046, and July 15, 2056 with a weighted average maturity of 11.7 years. SpaceX Notes are unsecured obligations of the Company and rank equally in right of payment with all existing and future unsubordinated indebtedness, liabilities and other obligations of the Company. The proceeds of the SpaceX Notes were used to repay the SpaceX Bridge Loan (as defined and described in Note 9, Debt of our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q) in full and to pay related fees and expenses. The remaining proceeds were used for general corporate purposes.
The SpaceX Notes bear annual coupon interests between 5.350% and 6.650% with a weighted average coupon interest rate of 5.855%. Interest is payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2027.
SpaceX Notes are redeemable, in whole or in part, at the Company’s option at any time and from time to time prior to the applicable Par Call Date, which is defined as a date ranging from one to six months prior to maturity for each tranche. The redemption price of each tranche is equal to the greater of (i) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the respective tranche matured on the applicable Par Call Date) on a semi-annual basis at the Treasury Rate plus the applicable spread between 0.002 and 0.003 basis points for such tranche less (b) interest accrued and unpaid thereon to the date of redemption, and (ii) 100% of the principal amount of the SpaceX Notes to be redeemed, plus accrued and unpaid interest, if any, thereon to, but excluding, the redemption date. On or after the applicable Par Call Date, SpaceX Notes are redeemable, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the respective SpaceX Notes being redeemed plus accrued and unpaid interest.
The SpaceX Notes contain customary events of default and affirmative and negative covenants, including restrictions on additional liens in excess of 7.5% of the Company’s consolidated total assets and fundamental changes (which is limited to a merger where the Company is not the surviving entity outside certain jurisdictions).
SpaceX Credit Facility
In February 2025, SpaceX entered into a five-year senior unsecured revolving credit agreement with a syndicate of banks, under which the Company may borrow up to $1,500 million (“SpaceX Credit Facility”). The SpaceX Credit Facility is subject to certain customary representations, warranties, covenants, and events of default, including a maximum financial covenant requiring the Company to maintain a Consolidated Leverage Ratio (as defined in the SpaceX Credit Facility) of no greater than 3.75 to 1.0 as of the end of each fiscal quarter (subject to temporary increases to 4.25 to 1.0 following certain qualified acquisitions) and other customary reporting requirements. The SpaceX Credit Facility also includes sublimits of up to $150 million for financial letters of credit and up to $1,000 million for performance letters of credit. The SpaceX Credit Facility terminates, and all outstanding loans become due and payable, on February 7, 2030, unless the parties agree to an extension in accordance with the terms of the SpaceX Credit Facility. As of June 30, 2026, no amounts were outstanding under the SpaceX Credit Facility.
Borrowings under the SpaceX Credit Facility bear interest, at the Company’s option, at a rate per annum equal to (i) a forward-looking term rate based on SOFR (“Term SOFR”) plus an applicable margin ranging from 0.75% and 1.25% (depending on the Company’s debt rating), or (ii) a base rate equal to the highest of (a) Federal Funds Rate plus 0.5%, (b) the Prime Rate, (c) Term SOFR plus 1.00%, and (d) 1.00% plus an applicable margin ranging from 0.0% and 0.25% (depending on the Company’s debt rating). The Company may also borrow in various alternative currencies, with interest calculated at rates based on SONIA for Pound Sterling-denominated loans and EURIBOR for Euro-denominated loans, plus an applicable margin. In addition, the Company pays a commitment fee on the unused portion of the SpaceX Credit Facility, which ranges from 0.07% (amended to 0.06% under the Amended SpaceX Credit Facility described below) to 0.11% per annum based on the Company’s debt rating. As of June 30, 2026, the Company was in compliance with all covenants under the SpaceX Credit Facility.
In March 2026, the Company entered into a First Amendment to Credit Agreement and Waiver (the “First Amendment”) with its lenders, in connection with the Company’s entry into the SpaceX Bridge Loan (as defined below). The First Amendment, among other things, (i) waived certain specified defaults and (ii) amended certain definitions and covenants under the SpaceX Credit Facility to conform to the terms of the SpaceX Bridge Loan.
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In May 2026, SpaceX amended the SpaceX Credit Facility to increase the borrowing capacity up to $5,000 million (“Amended SpaceX Credit Facility”). As part of the Amended SpaceX Credit Facility, the sublimit for performance letters of credit was increased to $2,000 million. The Amended SpaceX Credit Facility terminates, and all outstanding loans become due and payable, on May 19, 2031, unless the parties agree to an extension in accordance with the terms of the Amended SpaceX Credit Facility. All other terms were consistent with the terms of the SpaceX Credit Facility.
Material Cash Commitments
From time to time in the ordinary course of business, we enter into agreements with suppliers for the purchase of parts and raw materials to manufacture our products. However, due to contractual terms, variability in the precise growth curves of our development and production ramps, and opportunities to renegotiate pricing, these contracts generally do not have long-term binding and enforceable purchase orders, and the timing and magnitude of purchase orders beyond the short term is difficult to accurately project. Because we do not have long-term purchase orders for these parts and raw materials, future purchases may result in material cash commitments.
We did not have any material changes in our material cash commitments during the three months ended June 30, 2026 other than activities in the ordinary course of business and as noted below. For additional information about our material cash commitments, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Material Cash Commitments” in our Prospectus and Note 16 - Commitments and Contingencies of our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Spectrum Transaction
On September 7, 2025, the Company entered into a License Purchase Agreement (the “Spectrum License Purchase Agreement”) with Spectrum Business Trust 2025-1, a Nevada Business Trust (“Trust”) and EchoStar Corporation (“EchoStar”) for the purchase of EchoStar’s licenses related to 50 MHz of spectrum (the “AWS-4 and H-Block Licenses” and the transactions contemplated thereby, “Spectrum Transaction”). On November 5, 2025 the parties amended and restated the Spectrum License Purchase Agreement to include EchoStar’s licenses for up to 15 MHz of additional unpaired AWS-3 spectrum (together with the AWS-4 and H-Block Licenses, the “Spectrum Licenses”).
The total consideration for the acquisition of the Spectrum Licenses is approximately $19.6 billion, consisting of (i) approximately $11.1 billion in equity, payable through the issuance of approximately 261.8 million shares of the Company’s Class A common stock at a fixed value of $42.40 per share, and (ii) up to $8.5 billion related to the payoff of designated EchoStar debt, with any shortfall below $8.5 billion to be paid in cash. The allocation of cash and equity consideration is subject to certain adjustments based on the amount of EchoStar debt satisfied at or prior to closing. The Spectrum License Purchase Agreement provides that the transfer of the Spectrum Licenses occurs in two steps: first, the transfer of the Spectrum Licenses by EchoStar to the Trust (the “Spectrum Transfer Closing”), and second, the Spectrum Licenses will be transferred by the Trust to the Company (the “Spectrum Acquisition Closing”). The Foreign Assets will be transferred directly to the Company at the Spectrum Acquisition Closing, to the extent the required regulatory approvals have been obtained by such date; provided, however, that the failure to obtain such approvals will not delay or prevent the Spectrum Acquisition Closing.
In connection with the Spectrum License Purchase Agreement, the Company and the Trust entered into a credit agreement (the “Spectrum Credit Agreement”), pursuant to which the Company has agreed upon the Spectrum Transfer Closing, to make payments to the Trust (via loans which are contemplated to be forgiven at six-month intervals), for the Trust to make payments on EchoStar’s debt (interest only) through at least November 30, 2027, but in no event later than November 30, 2028. Although these payments are structured as loans from the Company to the Trust, there is no expectation of repayment as the loan payments are forgiven and are accounted for as additional consideration for the acquisition of the Spectrum Licenses. Accordingly, the payments are recognized as prepaid assets until the Spectrum Acquisition Closing at which point they will be recognized as intangible assets. Total payments expected to be made under the Spectrum Credit Agreement are $1,241 million in 2026, of which $856 million was paid as of June 30, 2026, and $828 million in 2027, assuming an expected closing date of November 30, 2027. The Company may need to make additional payments totaling $827 million if the Spectrum Acquisition Closing occurs at November 30, 2028.
The Spectrum Transaction was approved by the FCC on May 12, 2026, and the Spectrum Transfer Closing occurred on May 22, 2026. On that date, the Spectrum Licenses were transferred to the Trust, where they will remain until the Spectrum Acquisition Closing. Upon closing, the Company intends to either use cash and cash equivalents on hand or seek alternative financing sources to fund the cash payment to EchoStar. The $11.1 billion equity consideration will be issued at the Spectrum Acquisition Closing.
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Summary of Cash flows
The following table summarizes our cash flows for the periods indicated:

Six Months Ended June 30,
(in millions) 2026 2025
Net cash provided by (used in)
Operating activities $ 3,466  $ 351 
Investing activities $ (34,487) $ (6,032)
Financing activities $ 100,291  $ 9,199 

Operating Activities
Net cash provided by operating activities increased by $3,115 million from $351 million during the six months ended June 30, 2025 to $3,466 million during the six months ended June 30, 2026. This increase was primarily driven by lower net loss exclusive of non-cash items, an increase in working capital for deferred revenue of $1,489 million from upfront payments from our Space and Connectivity customers, partially offset by an increase in working capital for accounts receivable of $1,533 million and a decrease in accounts payable of $397 million.
Investing Activities
Net cash used in investing activities increased by $28,455 million from $6,032 million during the six months ended June 30, 2025 to $34,487 million during the six months ended June 30, 2026. This increase was primarily driven by an increase in capital expenditures of $21,511 million related to the build out of data centers and related infrastructure, and space launch facilities and related infrastructure, an increase in purchases of marketable securities of $13,029 million from cash proceeds received from the IPO and the SpaceX Notes, and an increase in payments to EchoStar for the Spectrum Licenses of $856 million. This increase was partially offset by an increase in cash received from matured marketable securities of $6,705 million.
Financing Activities
Net cash provided by financing activities increased by $91,092 million from $9,199 million during the six months ended June 30, 2025 to $100,291 million during the six months ended June 30, 2026. This increase was primarily driven by an increase in proceeds from our IPO of $85,675 million and increase in proceeds from the SpaceX Notes and other financing arrangements of $40,869 million, partially offset by increase in the repayment of debt and other existing debt obligations of $33,406 million from the repayment of the SpaceX Bridge Loan, and increase in payments for repurchase of our common and redeemable convertible preferred stock of $3,906 million.

Critical Accounting Estimates
For a description of our critical accounting policies and estimates, refer to the section “Critical Accounting Estimates” in our Prospectus. There have been no material changes to our critical accounting policies and estimates as described in our Prospectus.

Recent Accounting Pronouncements
Refer to Note 2, Summary of Significant Accounting Policies, to the to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
In the six months ended June 30, 2026, we issued the new SpaceX Notes and repaid the SpaceX Bridge Loan. The effective interest rate on the SpaceX Notes was 6.03% as of June 30, 2026. As of June 30, 2026, we had no variable rate debt outstanding.
Except as described above, there have been no material changes to our market risk exposures during the three months ended June 30, 2026. For more information about our market risk, please see the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Quantitative and Qualitative Disclosures About Market Risk” in our Prospectus.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, 2026 (the end of the period covered by this Quarterly Report on Form 10-Q). Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2026, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls
Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings
We are involved in the legal proceedings described in Note 16 - Commitments and Contingencies, and we are subject to other claims and litigation arising in the ordinary course of business. The outcome of any litigation is inherently uncertain, and if decided adversely to us, or if we determine that settlement of particular litigation is appropriate, we may be subject to liability that could have a material adverse effect on our business.

Item 1A. Risk Factors
The risk factor set forth below supplements the risk factors disclosed under the section titled "Risk Factors" in our Prospectus. Except as set forth below, there have been no material changes from the risk factors previously disclosed in our Prospectus which could materially and adversely affect our business, financial condition and results of operations.
Risks related to our AI infrastructure and data center operations could adversely affect our AI segment's business and financial results.
We generate an increasing portion of our consolidated revenue from our AI segment. This growth is primarily driven by our AI Infrastructure business, which depends on continued AI adoption and scaling. If AI development does not progress as anticipated, if advancements in model efficiency or alternative architectures reduce demand for our infrastructure, if we fail to adapt to evolving customer requirements or technological changes, or if we cannot compete effectively, our business and results of operations could be adversely affected. In addition, a significant portion of our AI infrastructure revenue is concentrated in a small number of customers. Our cloud services agreements generally provide for monthly fees and, after an initial period inclusive of capacity ramp (generally, a number of months), may be terminated by either party upon 90 days' notice. Accordingly, the loss of a significant customer, the termination or non-renewal of one or more of these agreements, our inability to replace lost business on comparable terms, reduced spending, shifts to internally developed infrastructure, migration to competing platforms or changes in these customer relationships could materially adversely affect our AI segment and consolidated revenue, results of operations, and cash flows and future growth. Moreover, our cloud services depend on reliable data center operations and timely development. Physical damage, natural disasters, cybersecurity incidents, construction delays, workforce disruption or turnover, power constraints, supply chain disruptions, equipment
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shortages, regulatory restrictions, or permit delays could impair our ability to deploy capacity, disrupt service delivery, increase costs, and adversely affect our financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Equity Securities
From April 1, 2026 through June 12, 2026 (the date of the filing of our registration statement on Form S-8, File No. 333-296740), we issued and sold to our employees and other service providers an aggregate of 8,510,615 unregistered shares of Class A common stock upon the exercise of stock options under the Space Exploration Technologies Corp. 2015 Equity Incentive Plan, the Space Exploration Technologies Corp. Amended and Restated 2024 Equity Incentive Plan (the “2024 Plan”), and the xAI Corp. Amended and Restated 2023 Equity Incentive Plan (the “xAI 2023 Plan”). From April 1, 2026 through June 12, 2026, we issued and sold to our employees and other service providers an aggregate of 745,230 unregistered shares of Class B common stock upon the exercise of stock options under the xAI 2023 Plan. From April 1, 2026 through June 12, 2026, we granted an aggregate of 25,917,613 restricted stock units under the 2024 Plan, which may vest and be settled for an equal number of shares of Class A common stock. From April 1, 2026 through June 12, 2026, we issued and sold to our employees and other service providers an aggregate of 3,171,855 shares of unregistered Class A common stock pursuant to the Space Exploration Technologies Corp. Second Amended and Restated 2017 Employee Stock Purchase Plan and the Space Exploration Technologies Corp. 2023 Employee Stock Purchase Plan.
We believe the offers, sales, and issuances of the above securities were exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act (or Regulation D promulgated thereunder), Regulation S promulgated under Section 5 of the Securities Act, or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or pursuant to benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions. All recipients had adequate access, through their relationships with us, to information about the Registrant.
Use of Initial Public Offering Proceeds
On June 15, 2026 the Company completed its IPO, in which the Company issued and sold 638,888,888 shares of its Class A common stock at a public offering price of $135.00 per share, including the full exercise of the underwriters’ over-allotment option, which resulted in net proceeds of $85,675 million after deducting the underwriting commissions and offering costs of $575 million. The shares sold in the offering were registered under the Securities Act pursuant to our Registration Statement on Form S-1 (File No. 333-296070) which was declared effective by the SEC on June 11, 2026. Goldman Sachs & Co. LLC, Morgan Stanley, BofA Securities, Citigroup, J.P. Morgan, Barclays, Deutsche Bank Securities, RBC Capital Markets, UBS Investment Bank, and Wells Fargo Securities acted as book-running managers for the IPO. Cantor, Needham & Company, Raymond James, Societe Generale, Stifel, William Blair, BTG Pactual, ING, Macquarie Capital (USA) Inc., Mirae Asset Securities, Mizuho, and Santander acted as co-managers. None of the expenses associated with our IPO were paid, directly or indirectly, to any of our directors or officers, any persons owning 10% or more of any class of equity securities, or to any of our affiliates.
As described in the Prospectus, the Company intends to use the net proceeds from the IPO to fund its growth strategy, including the expansion of the Company’s AI compute infrastructure, enhancements to the Company’s launch infrastructure and launch vehicles, increases in the scale and capacity of the Company’s satellite constellations, and any remaining amounts for general corporate purposes.
Unregistered Sales of Equity Securities
From April 1, 2026 through June 12, 2026 (the date of the filing of our registration statement on Form S-8, File No. 333-296740), we issued and sold to our employees and other service providers an aggregate of 8,510,615 unregistered shares of Class A common stock upon the exercise of stock options under the Space Exploration Technologies Corp. 2015 Equity Incentive Plan, the Space Exploration Technologies Corp. Amended and Restated 2024 Equity Incentive Plan (the “2024 Plan”), and the xAI Corp. Amended and Restated 2023 Equity Incentive Plan (the “xAI 2023 Plan”). From April 1, 2026 through June 12, 2026, we issued and sold to our employees and other service providers an aggregate of 745,230 unregistered shares of Class B common stock upon the exercise of stock options under the xAI 2023 Plan. From April 1, 2026 through June 12, 2026, we granted an aggregate of 25,917,613 RSUs under the 2024 Plan, which may vest and be settled for an equal number of shares of our Class A common stock. From April 1, 2026 through June 12, 2026, we issued and sold to our employees and other service providers an aggregate of 3,171,855 shares of Class A Common Stock pursuant to the Space Exploration Technologies Corp. Second Amended and Restated 2017 Employee Stock Purchase Plan and the Space Exploration Technologies Corp. 2023 Employee Stock Purchase Plan.
We believe the offers, sales, and issuance of the above securities were exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act (or Regulation D or Regulation S promulgated thereunder), or Rule 701 promulgated under
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Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or pursuant to benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions. All recipients had adequate access, through their relationships with us, to information about the Registrant.

Item 3. Defaults Upon Senior Securities
None.

Item 4. Mine Safety Disclosures
Not applicable.

Item 5. Other Information
Rule 10b5-1 Trading Arrangements
During the three months ended June 30, 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as defined in Item 408 of Regulation S-K), except as follows:
Pursuant to the extended lock-up arrangements described in the Prospectus, Bret Johnsen , Chief Financial Officer , agreed to subject the vast majority of his shares to the extended lock-up period. On June 16, 2026 , Mr. Johnsen, individually and on behalf of B & C Johnsen Holdings LLC, adopted a Rule 10b5-1 trading arrangement that does not commence sales until 2027 and covers up to 919,497 shares of Class A common stock of the Company, which are subject to the lock-up period (as defined in the Prospectus). The arrangement is subject to certain conditions and expires on June 17, 2027 , or such earlier date upon which all transactions are completed.
Pursuant to the extended lock-up arrangements described in the Prospectus, Gwynne Shotwell , President, Chief Operating Officer and a director, agreed to subject the vast majority of her shares to the extended lock-up period. On June 23, 2026 , Ms. Shotwell adopted a Rule 10b5-1 trading arrangement for up to 585,605 shares of Class A common stock of the Company, which are subject to the lock-up period (as defined in the Prospectus). The arrangement is subject to certain conditions and expires on June 30, 2027 , or such earlier date upon which all transactions are completed.
On June 12, 2026 , various entities affiliated with Valor Equity Partners (the “Valor Entities”), where Antonio J. Gracias , a member of the board of directors , is the founder, CEO and Chief Investment Officer, adopted a Rule 10b5-1 trading arrangement for the potential distribution to limited partners and general partners of the Valor Entities of up to 225,857,490 shares of Class A common stock of the Company, subject to certain conditions. The arrangement’s expiration date is September 30, 2027 , or such earlier date upon which all transactions are completed.

Item 6.    Exhibits

Exhibit No. Description of Exhibit
2.1 Agreement and Plan of Merger and Reorganization, by and among Space Exploration Technologies Corp., X.AI Holdings Corp., K2 Merger Sub Inc. and K2 Merger Sub 2 LLC, dated January 31, 2026 (incorporated by reference to Exhibit 2.1 to the Company’s Amendment No. 2 to its Registration Statement on Form S-1 filed on June 3, 2026 ) .

2.2 Agreement and Plan of Merger, dated June 16, 2026, by and among Space Exploration Technologies Corp., X67 Inc. and Anysphere, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 16, 2026).

3.1 Restated Certificate of Formation of Space Exploration Technologies Corp.

3.2 Amended and Restated Bylaws of Space Exploration Technologies Corp.

4.1 Indenture, dated as of June 26, 2026, between Space Exploration Technologies Corp. and The Bank of New York Mellon Trust Company, N.A., as trustee containing Form of 5.350% Senior Notes due 2031, Form of 5.650% Senior Notes due 2033, Form of 5.875% Senior Notes due 2036, Form of 6.600% Senior Notes due 2046, Form of 6.650% Senior Notes due 2056 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on June 26, 2026).

4.2 Registration Rights Agreement, dated as of June 26, 2026, among Space Exploration Technologies Corp. and BofA Securities, Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, and Morgan Stanley & Co. LLC ( i ncorporated by reference to Exhibit 4. 7 to the Company’s Current Report on Form 8-K , filed on June 26, 2026 ).

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Exhibit No. Description of Exhibit
10.1† Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1, filed on May 20, 2026).

10.2† Space Exploration Technologies Corp. Amended and Restated 2024 Equity Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8, filed on June 12, 2026).

10.3† Space Exploration Technologies Corp. Second Amended and Restated 2017 Employee Stock Purchase Plan (incorporated by reference to Exhibit 99.2 to the Company’s Registration Statement on Form S-8, filed on June 12, 2026).

10.4† Mesh Optical Technologies Corporation 2025 Equity Incentive Plan .

10.5 Amended and Restated Credit Agreement, dated as of May 19, 2026, by and among Space Exploration Technologies Corp., the Guarantors party thereto, the Lenders party thereto, Bank of America, NA., as the administrative agent, an L/C Issuer and the Swing Line Lender, and the other L/C Issuers from time to time party thereto (incorporated by reference to Exhibit 10.10 to Amendment No. 1 to the Company’s Registration Statement on Form S-1, filed on June 1, 2026 ) .

31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

32.1* Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.

32.2* Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

101.INS Inline XBRL Instance Document
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
__________________
*     Furnished herewith.
† Management contract or compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Space Exploration Technologies Corp.

Date: August 4, 2026
By: /s/ Bret Johnsen
Name: Bret Johnsen
Title: Chief Financial Officer and Duly Authorized Officer

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