The company reported a net loss of $541 million, or 9 cents a share—a marked improvement from a $1 billion loss a year ago and higher than the range of analyst estimates, which spanned from a loss of $1.26 per share to a gain of 33 cents. Adjusted EBITDA nearly tripled to $3.5 billion.

Despite the strong results, shares of SpaceX declined in after hours trading Tuesday, falling more than 7% following the release of the results.

The results land at a pivotal moment for SpaceX, which has tumbled roughly 50% from its peak stock price of $211 days after its IPO on June 12. Investor anxiety around capital expenditures and sluggish return on massive spending had weighed down tech stocks in recent weeks before markets staged a rally on Tuesday.

One major question for investors during the call related to SpaceX’s capital spending, which hit $18.4 billion in Q2 alone, with $15.8 billion from the AI segment. The quarterly run rate, $73.5 billion annualized, will outpace the $48.7 billion capex consensus analysts had going into this quarter. Thus far, investors have had low patience for higher spending without significant revenue growth and acceleration, in addition to flattering free cash flow figures, which showed in SpaceX’s tumbling after-hours trading.

SpaceX’s second quarter results are fueling a strengthened AI trade with an early $1 billion top-line beat, Starlink’s subscriber base doubling year-over-year, and a flush of new cloud-computing contracts that catapulted the AI segment from a loss into positive adjusted EBITDA territory for the first time.

More immediately, the release of quarterly numbers will trigger the opening of a lockup provision that will allow pre-IPO shareholders to begin selling a portion of their holdings that could exert some more downward pressure on the stock. An even larger glug of insider selling will become possible after third-quarter results later this year, when roughly 900 million additional shares come unlocked—a block larger than the entire IPO issuance. SpaceX’s stock price is down more than 5% in after-hours trading.

SpaceX currently has a $100 billion cash cushion, plus it raised $25 billion in a bond offering to give it room to run, but investors are likely to have questions about how long it will take for that spending to translate into revenues.

Starlink spun up $4.29 billion in quarterly revenue, up 66% year-over-year, firmly in position as the golden goose of SpaceX. Its operating margin was 38.6%, well above the 35.9% margin analysts had expected. The second quarter wrapped with 12 million Starlink subscribers, double the number a year ago and up 1.7 million from Q1. Average revenue per user held steady at $66 a month. Enterprise and government revenue, a booming line item within the business unit, grew 108% year-over-year to $1.8 billion, boasting partnerships with American Airlines, Southwest, and Virgin Atlantic, and more than $6 billion in contracts with the U.S. Space Force.

AI revenue grew 247% year-over-year to $2.6 billion, fueled by $14.1 billion in new cloud services agreements. Compute capacity grew to 1.4 gigawatts, up from 0.4 a year ago but AI still posted a $1.26 billion operating loss. In the first quarter the loss was $2.47 billion.

During the call, founder and CEO Elon Musk disclosed that the company’s internal revenue projections had been revised upward since the June IPO.

“Our internal projections for reaching $1 trillion in revenue—not [annualized revenue run rate], but revenue—have moved up from 2031 to 2030,” said Musk, adding that “there’s a non-zero chance of that being in 2029.”

Chief financial officer Bret Johnson said the $100 billion ARR target for December was now within reach due to cloud contracts and SpaceX’s pending Cursor acquisition. However, SpaceX would need to 10x in three or four years to reach $1 trillion—a herculean feat given that bullish analysts have projected less than half that for 2030.

Still, Musk said he believes the incremental revenue gap of about $981 billion will close because of SpaceX’s next-generation V3 satellite, which he described as “an order of magnitude more capable” than the current version.

“Even if our monetization per bit dropped by a factor of 10, that would still mean a 10x increase in the revenue of Starlink,” said Musk. “It’s not out of the question that at some point Starlink will deliver a majority of the world’s internet.”

Musk also pointed to AI growth, noting that SpaceX is “exclusive to Nvidia” for its compute buildout because Musk believes Nvidia’s Vera Rubin architecture is superior. He said SpaceX expects to start launching an orbital AI satellite next year that will allow it to put AI data centers in orbit, lowering costs well below competitors.