Lift off for SpaceX?

**Felicity Hammer** (0:00)
SpaceX rockets upwards, beating analysts' forecasts.

**SPEAKER_2** (0:04)
Three, two, one.

**SPEAKER_3** (0:07)
SpaceX wants to be able to take you to the moon, take you to Mars and ultimately beyond.

**Felicity Hammer** (0:12)
It's World Business Report from the BBC World Service. I'm Felicity Hammer. Coming up, SpaceX has its first numbers out since its market debut. We'll find out what it's worth. A tough year for oil markets has been a very good year for oil company profits and voice streamers like Spotify and Apple Music have gobbled up all the subscribers and will have to start fighting each other for growth.
Yes, we have liftoff on SpaceX's first quarterly earnings since it went public.

**SPEAKER_2** (0:49)
Three, two, one.

**Felicity Hammer** (0:56)
SpaceX has announced second quarter earnings of $7.8 billion in revenue, beating expectations. It is in fact a 92% rise in revenue for the Elon Musk-run rocket, satellite and AI tech company. It has seen meteoric growth in its Starlink and AI business. But overall, it's made a loss of more than $500 million.
Its share price is down more than 7%, almost 8% in after-hours trading. So what are investors thinking? Well, let's ask one. Kevin Jiang is founder and CEO of Mangusta Capital, a venture capital firm which specialises in investing in AI companies. Kevin, hello. You are an investor in SpaceX. So what's your reaction to these results?

**Kevin Jiang** (1:41)
Yeah, absolutely. Thank you so much for having me on the programme today.
You know, overall, the results have been actually exceptional across the three main segments of the business. Particularly on the AI business, it's actually, I would say, a positive surprise that the revenue was growing so quickly, up almost 250% year over year to $2.5 billion. So we're pretty impressed with overall the financial performance of the business so far. Obviously, the market is a little bit mixed on it though.

**Felicity Hammer** (2:17)
It is worth breaking down, actually, where the numbers have come from. So we've learned that the business' Starlink revenue was well over $4 billion. As you say, its AI revenue was more than $2.5 billion. Its space revenue was $962 million.
You were an investor in XAI. That's how you come to be an investor in SpaceX. Are you happy to be tied into the fortunes of the space side of the business?

**Kevin Jiang** (2:42)
Absolutely. I think the real gem of the business that everyone's looking at is the Starlink business, which is intimately tied obviously with the launch and space business as well.
And Starlink continues to be a very high performing business with 12 million subscribers and revenues of $4.3 billion. So, and generating a lot of positive cash flow for the business, right? $2.6 billion in adjusted EBITDA. So, we continue to think that that's a great business to be in. And the space business or the launch business itself has impressive motes that the management team and Elon have been able to build. And I think that's a very hard thing to take away from them or compete against as a new business entering any sort of launch or space business.

**Felicity Hammer** (3:30)
Its main business at the moment seems to be spending though, doesn't it? Spending is absolutely colossal. Up more than 550% to $18.3 billion in the first six months of the year, alongside a net loss of $2 billion.
Is that what you expected at this stage of the business?

**Kevin Jiang** (3:51)
You know, it's not really that surprising, to be honest, because we knew that this business was spending a lot, particularly on the AI side of things. So as you probably know, a vast majority of that spend, about $16 billion of the CapEx spend during the quarter was just from the AI segment itself. And you know, that's not out of line with a lot of what all a lot of the big AI companies, like the OpenAI and Anthropics are spending as well. So not to say even mention, you know, the public companies like Meta, Apple and so on. So I think, you know, while it is a big number, of course, I think investing in the future of growth within that segment, and also with the pending acquisition of Cursor, I think it's an area of a lot of long term potential. But you know, the market may not be super happy with all the CapEx spend that's going into the business.

**Felicity Hammer** (4:47)
Kevin Jiang, founder and CEO of Mangusta Capital, thank you very much. Let's bring in our regular markets expert, Jennifer Snyder, who is a financial advisor at Brighton Securities in Rochester, New York, and has also been looking at these results for us.