SpaceX has given guidance for $100 billion in annual recurring revenue by year-end, supported by contracts to rent computing capacity, a Bloomberg Intelligence analyst said ahead of third-quarter earnings.
The larger question is how much the company plans to spend in 2027, the analyst said. SpaceX lacks the operating cash flow available to other large cloud computing companies to support that spending.
The analyst spoke during an earnings preview on Bloomberg Technology, published Oct. 20. The programme said SpaceX would release its third-quarter results after the market closed that day.
Contracts for computing capacity give SpaceX visibility into its annual recurring revenue, a measure of revenue expected to repeat over a year, the analyst said. The remarks cited company guidance rather than an announced earnings result.
The analyst questioned how investors would assess capital spending above $150 billion, without presenting that amount as company guidance. The discussion left SpaceX's actual spending commitment for next year open.
SpaceX spent $18.4 billion on capital investments in the second quarter, Bloomberg Technology said. Analysts expected spending of $19.6 billion in the third quarter, the programme said.
A second Bloomberg Intelligence analyst said the company's earnings prospects depend heavily on artificial intelligence, while its Starlink satellite connectivity business currently generates most of its profits.
The rocket business supports those operations, the analyst said, calling it “the enabler of those two businesses.” In the near term, launches support Starlink's efforts to generate cash and profit.
SpaceX records no revenue for internal launches, which account for more than two-thirds of its launches, the second analyst said. That limits how much launch activity appears in the space business's revenue.
Starship provides the size needed to carry larger Starlink satellites and, eventually, data centres into space, the analyst said. Larger satellites would help improve connections with equipment on the ground.
The discussion then turned to selling artificial intelligence services. The first analyst said Cursor could grow quickly because coding tools are among the more successful uses of generative artificial intelligence.
The analyst said Grok still lagged competing models in capability and sought more detail about xAI's spending to train its systems. How the company would earn revenue from the model remained less clear.
The analyst said it was clear how they make money from the compute rental side. Questions remained about revenue from giving developers access to Grok through an application programming interface.
Third-quarter revenue was expected to approach $13 billion, driven by artificial intelligence, Bloomberg Technology said. The preview did not provide earnings results or settle the questions about future spending and model revenue.
