Episode Details

Space Exploration Technologies Corp. (SPCX) Q2 2026 — Reported August 4, 2026 AFTER the US close - the first-ever quarterly report as a public company, for the calendar quarter ended June 30, 2026. Revenue $7,814M, +92% YoY, versus roughly $6.93B expected. Diluted loss per share $0.09 versus a $0.26 loss modelled. Net loss $541M, narrowed from $1,008M. Adjusted EBITDA $3,538M, +191%. All three segments beat: Connectivity $4,291M (+66%), AI $2,561M (+247%), Space $962M (+29%). But capital expenditure was $18,369M in the quarter - 235% of revenue, up more than six-fold from $2,825M, and about $5B above the ~$13.2B the Street had modelled. SPCX closed the regular session at $125.33, up 9.43%, then fell in extended trading. IPO priced at $135.00 on June 11 and began trading June 12. Closing high $201.80 (Jun 16); all-time closing low $108.37 (Jul 31). SpaceX beat on every line Wall Street actually models - and the stock fell anyway, because the number that moved it is not on the income statement. Capital expenditure was $18.37 BILLION in one quarter against $7.81 billion of revenue: $2.35 of capital spending for every $1 of sales, up more than six-fold year over year, with $15.83B of it in AI alone - 618% of the AI segment's own revenue. First-half operating cash flow was $3.47B against $28.48B of capex, so free cash flow for the half was NEGATIVE $25.0 billion. Three things almost nobody has connected. FIRST, only ONE of the three segments makes money: Connectivity earned $1,656M of operating income at a 38.6% margin, and it pays for $1,799M of losses in Space and AI combined. SECOND, AI's celebrated first-ever positive Adjusted EBITDA of $1,146M is a depreciation artifact - $23.55B of H1 AI capex adds roughly $4.7B a year of depreciation on a five-year life, more than the entire figure being celebrated. THIRD, Starlink subscribers DOUBLED to 12.0 million while ARPU fell 22%, from $85 to $66; consumer revenue rose only 44% against 100% subscriber growth, so revenue per subscriber fell about 28%. And two trading days after this print, on August 6, the first lock-up tranche frees roughly 911 million shares - 143% of the entire IPO float. THE CALL: AVOID (1/5, A REMARKABLE COMPANY AT AN IMPOSSIBLE PRICE) — base-case value ~$32.0 vs ~$125.33 today. KEY METRICS: - CALL: AVOID 1/5. Fair value ~$32 against a $125.33 close - 74% below. This is NOT a call against SpaceX the company; the quarter was genuinely strong and the engineering is unmatched. It is a call against this price. Method: a ten-year path-to-profitability DCF, because there is no free cash flow to discount. Base case: revenue compounds 25% a year for a decade, $30B in 2026 to $283B in 2035; capex plateaus near $100B; 2035 free cash flow $55B (a 19% margin). Discounted at 9.5% with 3% terminal growth: $846B terminal value, $374B discounted back nine years, less $21B for the negative interim cash flows, plus $61B net cash, over 13,176M shares = $31. Grid at 8.5/9.5/10.5%: bear $15/$12/$10, base $39/$31/$26, bull $86/$68/$55. A 30/50/20 weighting gives $33. EVERY cell is below the price - including the bull case at the friendliest discount rate we would defend. - REVERSE DCF - WHAT $125.33 REQUIRES: 13,176M shares (Class A 7,607M + Class B 5,569M off the June 30 balance sheet) x $125.33 = $1,651B of equity; less $61B of net cash ($100.0B cash and marketable securities against $39.4B of debt and finance leases) = $1,591B of enterprise value. At 9.5% and 3% terminal growth that needs roughly $256 BILLION of free cash flow in 2036. At a generous 25% free-cash margin that is $1.02 TRILLION of revenue - a level no company has ever reached - and a 42% compound growth rate for ten straight years off today's $31B annualised run-rate. On that run-rate the stock trades at 51x sales and 112x even the flattering annualised Adjusted EBITDA. - THE CAPEX SHOCK, WHICH IS THE WHOLE STORY: $18,369M of capital expenditure in one quarter against $7,814M of revenue = 235% of revenue, up from $2,8