AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 5/6 · 28/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Reusable boosters establish a specific cost mechanism supported by reported Falcon reliability and substantial realized deployment. The operating constellation and disclosed technology, spectrum and licensing barriers add replication friction. Current peer economics remain missing.
durability · 2/4 · Repeated launch operations and deployed connectivity infrastructure support persistence, but competing constellation investment and regulatory dependence limit confidence. Starship flight achievements demonstrate progress without proving sustained commercial reuse or its projected cost reductions.
customer dependency · 2/4 · Enforceable backlog, expanding service-line adoption and enterprise activations demonstrate customer commitments indirectly. They do not establish switching costs or indispensable dependence, and cloud customers have short-notice termination rights after the initial period.
erosion resilience · 2/4 · Connectivity expanded adoption and operating income despite lower year-over-year ARPU, supporting some resilience. Competing infrastructure investment, weaker first-half launch volumes and continuing development burdens prevent a strong durability assessment. Generic competitive risks are not treated as realized customer losses.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 1/4 · Starlink subscriber ARPU declined 22.6% over the six-month comparison, primarily reflecting international expansion and lower-priced plans. Sequential stability at $66 is supportive but does not offset weak year-over-year monetization. Mix effects prevent interpreting the decline as a like-for-like price cut or proof of competitive distress.
retention · 2/4 · Subscriber expansion, enterprise activations and enforceable backlog provide indirect evidence of continuing demand. They do not distinguish retained customers from new acquisition or establish renewal rates. Cloud termination rights limit contractual persistence.
margin resilience · 2/4 · Connectivity's second-quarter operating margin improved year over year despite lower ARPU, while its six-month operating margin declined slightly. Widening consolidated operating losses and losses in Space and AI make resilience mixed across the issuer. These results do not independently prove pricing power or a moat.
contractual freedom · 2/4 · Fixed-price and usage-based service charges, advertising auctions and reserved fixed-price inventory establish actual pricing mechanisms. Existing-contract repricing rights remain undisclosed. Cloud termination rights permit flexibility for both parties but weaken durable price capture; contracted sales exclude cancellable future periods.
Predictability58
3 consecutive published annual periods (short history; lower confidence). Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 0.84
- Positive FCF years (%)
- 33.33
- FCF margin volatility (pp)
- 30.92
- observedAnnualPeriods
- 3.00
Financial strength39
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- netDebtEbitGrade
- 100.00
- interestCoverageGrade
- 0.00
- currentRatioGrade
- 55.71
- Interest coverage (x)
- -1.33
- Current ratio (x)
- 1.45
Capital allocation—
Missing required inputs: operatingReturn, dilution. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year average SBC / revenue (%)
- 7.52
- cashConversionGrade
- 0.00
Management50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · First-half operating cash generation of $3.466 billion and completed IPO financing coexist with $28.476 billion of capital expenditure, including $23.551 billion in AI, and $27.955 billion of non-cancelable commitments. Operating expansion is demonstrated, but returns on this investment remain unresolved. Capital access alone does not establish disciplined allocation.
incentive alignment · 2/4 · Options were not earned on 2025 adjusted EBITDA performance, and the CFO and COO agreed to extended lock-ups covering the vast majority of their shares. These are actual alignment mechanisms, but incomplete award and ownership coverage prevents a stronger assessment.
execution · 3/4 · Reported Falcon reliability, substantial launch deployment, 12 million Starlink service lines, enterprise activations and expanded compute infrastructure demonstrate execution. Management is assessed indirectly from operating outcomes. First-half launch declines, Starship's internal-only status and continuing AI operating losses temper the conclusion; future investment returns remain unproven.
governance · 1/4 · The last completed fiscal year lacked a compensation committee, and executive compensation decisions involved management with board approval of equity awards. The prospectus described intended reliance on committee-independence exemptions. A subsequently appointed independent director and audit committee member improves oversight evidence but does not resolve the disclosed compensation safeguards. Intended arrangements are not treated as proof of subsequent implementation.
Evidence
Central to our cost advantage is the reusability of key
Business / launch reusability and cost mechanism · Filed 12/06/2026
hardware—most notably boosters—which we recover, refurbish, and refly many times instead of discarding after
Business / booster recovery, refurbishment and reuse · Filed 12/06/2026
single use. This dramatically lowers per-launch costs by minimizing hardware replacement expenses and spreading
Business / hardware replacement cost mechanism · Filed 12/06/2026
Earth. Since 2023, we have launched more than 80% of mass to orbit for the world each year with an over 99%
Business overview / reported mass-to-orbit share · Filed 12/06/2026
mission success rate with Falcon rockets.
Business overview / Falcon mission success · Filed 12/06/2026
communications network powered by approximately 9,600 Starlink broadband and mobile satellites in Low-Earth
Business overview / deployed Starlink constellation · Filed 12/06/2026
Orbit, delivering connectivity to millions of consumer, enterprise, and government customers across 164 countries,
Business overview / customers and geographic reach · Filed 12/06/2026
territories, and other markets, as of March 31, 2026.
Business overview / operating footprint measurement date · Filed 12/06/2026
The satellite connectivity market involves significant barriers to entry, including substantial capital requirements,
Competition / satellite connectivity entry barriers · Filed 12/06/2026
advanced technological capabilities, access to spectrum and orbital resources, regulatory licenses and approvals, and
Competition / technology, spectrum and regulatory barriers · Filed 12/06/2026
the development of relationships with government, enterprise and commercial customers.
Competition / customer relationship development · Filed 12/06/2026
including, among others, AST SpaceMobile, Lynk, Globalstar and Skylo.
Competition / named satellite-to-mobile alternatives · Filed 12/06/2026
The markets in which we operate are rapidly evolving and intensely competitive, and we face competition from a
Risk factors / competitive market conditions · Filed 12/06/2026
Some competitors are investing significant capital to develop and deploy
Risk factors / competitor capital investment · Filed 12/06/2026
satellite constellations and related infrastructure that compete directly with our offerings, and companies based in
Risk factors / competing constellations and infrastructure · Filed 12/06/2026
Any failure or significant delay in obtaining required licenses and permits or failure to maintain them could disrupt
Risk factors / licensing and permit dependence · Filed 12/06/2026
several Starship flight tests (including the 12th) have resulted in FAA mishap determinations and SpaceX-led
Risk factors / realized Starship mishap determinations · Filed 12/06/2026
To date, all Starship launches have been classified as internal.
Operating metrics / internal classification of Starship launches · Filed 04/08/2026
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.
Connectivity MD&A / six-month subscriber growth, ARPU decline and enterprise revenue growth · Filed 04/08/2026
The Company generates service revenue from (i) fixed-price services that require advance or recurring monthly payments by the customer or (ii) variable-priced services based on actual data consumption.
Revenue recognition / fixed-price and usage-based services · Filed 04/08/2026
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.
Cloud services / monthly fees and termination rights · Filed 04/08/2026
Contracts are included in backlog when an enforceable agreement has been reached.
Revenue disclosures / enforceable backlog definition · Filed 04/08/2026
Backlog totaled
13
Table of Contents
$47,461 million as of June 30, 2026, of which $14,286 million was recognized as deferred revenue at June 30, 2026.
Revenue disclosures / June 30, 2026 backlog and deferred revenue · Filed 04/08/2026
an auction process in which advertisers bid to have their ads shown to the audience they are targeting, except for
Advertising / auction pricing mechanism · Filed 12/06/2026
certain reserved inventory, which is sold on a fixed price basis.
Advertising / reserved inventory fixed pricing · Filed 12/06/2026
Second Quarter Financial Highlights $, in millions Three Months Ended Six Months Ended June 30, 2026 March 31, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Revenue Space $962 $619 $746 $1,581 $1,611 Connectivity 4,291 3,257 2,588 7,548 5,062 AI 2,561 818 737 3,379 1,465 Total $7,814 $4,694 $4,071 $12,508 $8,138 Income (Loss) from Operations Space $(542) $(662) $(369) $(1,204) $(439) Connectivity 1,656 1,188 923 2,844 1,956 AI (1,257) (2,469) (1,524) (3,726) (2,460) Total $(143) $(1,943) $(970) $(2,086) $(943) Segment Adjusted EBITDA Space $(205) $(351) $(93) $(556) $131 Connectivity 2,597 2,087 1,583 4,684 3,200 AI 1,146 (609) (276) 537 (387) Total $3,538 $1,127 $1,214 $4,665 $2,944 Capex Space $1,174 $1,052 $946 $2,226 $1,705 Connectivity 1,367 1,332 1,130 2,699 1,944 AI 15,828 7,723 749 23,551 3,316 Total $18,369 $10,107 $2,825 $28,476 $6,965 Note: Segment Adjusted EBITDA is a non-GAAP financial measure.
Second-quarter financial highlights / segment operating results and capital expenditure · Filed 04/08/2026
Space Segment Operating and Financial Data $, in millions (except where noted) Three Months Ended Six Months Ended June 30, 2026 March 31, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Customer launches (#) 10 7 9 17 21 Internal launches (#) 28 33 37 61 63 Total launches (#) 38 40 46 78 84 Customer payloads (in metric tons) 87 45 88 132 163 Internal payloads (in metric tons) 397 511 563 908 938 Mass to orbit (in metric tons) 485 556 652 1,041 1,102 Launch services revenues $648 $330 $490 $978 $1,056 Launch & development revenues 314 289 256 603 555 Space revenues $962 $619 $746 $1,581 $1,611 Less: Cost of revenue $329 $281 $330 $610 $627 Research and development 1,076 930 693 2,006 1,219 Selling, general, and administrative 99 70 87 169 175 Impairment — — 5 — 29 Loss from operations $(542) $(662) $(369) $(1,204) $(439) Segment Adjusted EBITDA reconciliation Loss from operations $(542) $(662) $(369) $(1,204) $(439) Depreciation & amortization 158 166 146 324 308 Share-based compensation 179 145 125 324 233 Impairment — — 5 — 29 Space Adjusted EBITDA $(205) $(351) $(93) $(556) $131 Space Capex $1,174 $1,052 $946 $2,226 $1,705 Space Business Highlights • Space revenues grew 55% sequentially and 29% year-over-year to $962 million, driven by a higher number of large customer launches and a favorable customer shift compared to the prior year • Total costs and expenses for the Space segment were up by $389 million year-over-year, as we continued to accelerate R&D investments in our Starship program, which we believe will reduce the cost to orbit by 99% or more relative to the historical average, and unlock significant revenue potential across all business segments • Leading launch provider for the world with 78 launches and 1,041 metric tons of mass to orbit deployed over the six months ended June 30, 2026, primarily allocated to Connectivity for the deployment of our Starlink constellation • Starship V3 development continued to advance towards full and rapid reusability: • Completed Starship V3’s first suborbital mission in May, Flight 12, which achieved a successful lift off from our new Starbase pad, a precision landing of Starship’s upper stage, and deployment of modified V2 Starlink satellites • Subsequent to the second quarter, completed Starship Flight 13 in July, which achieved all flight objectives including deploying 20 production V3 satellites, demonstrating in-space relight of a Raptor engine, and executing the softest ever splashdown of Starship, providing critical views of an intact heatshield 4
Space operating data / launches, payloads, revenue, development spending and flight milestones · Filed 04/08/2026
Connectivity Segment Operating and Financial Data $, in millions (except where noted) Three Months Ended Six Months Ended June 30, 2026 March 31, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Starlink Subscribers (#, in millions, as of period end) 12.0 10.3 6.0 12.0 6.0 Starlink ARPU ($ per month) $66 $66 $85 $66 $85 Consumer revenues $2,485 $2,148 $1,721 $4,633 $3,213 Enterprise & government revenues 1,806 1,109 867 2,915 1,849 Connectivity revenues $4,291 $3,257 $2,588 $7,548 $5,062 Less: Cost of revenue $2,060 $1,651 $1,401 $3,711 $2,615 Research and development 294 205 143 499 266 Selling, general, and administrative 281 213 121 494 225 Income from operations $1,656 $1,188 $923 $2,844 $1,956 Segment Adjusted EBITDA reconciliation Income from operations $1,656 $1,188 $923 $2,844 $1,956 Depreciation & amortization 805 783 569 1,588 1,078 Share-based compensation 136 116 91 252 166 Connectivity Adjusted EBITDA $2,597 $2,087 $1,583 $4,684 $3,200 Connectivity Capex $1,367 $1,332 $1,130 $2,699 $1,944 Connectivity Business Highlights • Connectivity revenues were up 32% sequentially and 66% year-over-year to $4.3 billion, driven by strong Starlink subscriber growth, with Consumer revenues up 16% sequentially and 44% year-over-year, and an increase in Enterprise & Government revenues, up 63% sequentially and 108% year-over-year • Total costs and expenses for the Connectivity segment were up $970 million year-over-year, driven primarily by increased spend to support revenue growth, as well as higher R&D expenses for our next-generation V3 satellites, which we expect to deliver meaningful increases in broadband capacity and data density • Drove income from operations for the Connectivity segment up 79% year-over-year to $1.7 billion, and improved Connectivity Adjusted EBITDA by 64% year-over-year to $2.6 billion • Reached 12.0 million Starlink Subscribers as of the end of Q2 2026, doubling year-over-year and up 1.7 million sequentially, while maintaining ARPU at $66, in line with Q1 2026 • Demonstrated traction across our enterprise business: signed a major agreement with American Airlines; activated our service on a number of new airlines including Southwest, Virgin Atlantic, Iberia and Aer Lingus; and launched new Starlink Mobile partnerships with international carriers, including SoftBank, NTT Docomo and Spark NZ • Awarded over $6 billion in multi-year U.S.
Connectivity operating data / subscribers, ARPU, operating results and enterprise activations · Filed 04/08/2026
government contracts for Starshield, our secure satellite network designed specifically for government customers and national security applications, primarily from two major Space Force contracts for LEO-based communications and sensing constellations • Received FCC approval of the EchoStar license transfer for 65 MHz of spectrum in the U.S.
Connectivity highlights / government contracts and FCC spectrum-transfer approval · Filed 04/08/2026
AI Segment Operating and Financial Data $, in millions (except where noted) Three Months Ended Six Months Ended June 30, 2026 March 31, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Nameplate compute (in GW) 1.4 1.0 0.4 1.4 0.4 Advertising revenues $367 $343 $426 $710 $870 AI solutions & infrastructure revenues 2,194 475 311 2,669 595 AI revenues $2,561 $818 $737 $3,379 $1,465 Less: Cost of revenue $1,106 $456 $551 $1,562 $1,002 Research and development 2,178 2,379 1,122 4,557 2,030 Selling, general, and administrative 532 463 398 995 699 Restructuring charges (credits) 2 (11) 190 (9) 194 Loss from operations $(1,257) $(2,469) $(1,524) $(3,726) $(2,460) Segment Adjusted EBITDA reconciliation Loss from operations $(1,257) $(2,469) $(1,524) $(3,726) $(2,460) Depreciation & amortization 1,885 1,493 811 3,378 1,584 Share-based compensation 516 378 247 894 295 Restructuring charges (credits) 2 (11) 190 (9) 194 AI Adjusted EBITDA $1,146 $(609) $(276) $537 $(387) AI Capex $15,828 $7,723 $749 $23,551 $3,316 AI Business Highlights • AI revenues were up 213% sequentially and 247% year-over-year to $2.6 billion, primarily driven by an increase in AI solutions and infrastructure revenues from new Cloud Service Agreements, as well as an increase in Grok and X subscription revenues • Total costs and expenses for the AI segment were up $1.6 billion year-over-year, driven by increased R&D investment, primarily due to higher infrastructure spend as we accelerated compute deployment • Cut operating loss by 49% compared to Q1 2026 to a loss of $1.3 billion and achieved positive AI Adjusted EBITDA of $1.1 billion • Expanded compute capacity to 1.4 GW, up from 1.0 GW in Q1 2026 and 0.4 GW in Q2 2026, with the continued build-out of Colossus II and with significant incremental capacity under construction • Entered into several Cloud Services Agreements totaling $14.1 billion in contracted sales to provide customers with access to compute capacity, which resulted in $1.6 billion in incremental AI infrastructure revenues for the second quarter • Announced an agreement to acquire Cursor for $60 billion to accelerate our AI enterprise offerings with one of the most advanced AI coding tools available.
AI operating data / capacity, revenue, losses, investment and proposed Cursor acquisition · Filed 04/08/2026
Note 2. Other Definitions Contracted sales refers to the total value of the contracts signed for the non-cancellable, enforceable period, which includes the revenue recognized in the period as well as any deferred revenue related to these contracts.
Other definitions / enforceable contracted-sales period · Filed 04/08/2026
It does not include any estimated revenue amounts for the future periods that are cancellable either by us or the customer.
Other definitions / exclusion of cancellable future revenue · Filed 04/08/2026
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.
Liquidity and capital resources / completed IPO issuance and net proceeds · Filed 04/08/2026
The following table summarizes the Company’s non-cancelable contractual commitments as of June 30, 2026:
2026 (remaining six months)
$
2,728
2027
22,244
2028
2,172
2029
809
2030
2
Thereafter
—
Total
$
27,955
Letters of Credit and Surety Bonds
The Company had outstanding letters of credit of $645 million at June 30, 2026 related to various customer contracts, insurance agreements, and facility lease agreements.
Note 16 / non-cancelable contractual commitments · Filed 04/08/2026
$ 3,466 $ 351 Investing activities .............................................................................................................................................................
Selected cash flow information / operating cash generation · Filed 04/08/2026
None of the stock options became earned on account of our 2025 Fiscal Year adjusted EBITDA
performance.
Executive compensation / options not earned on 2025 adjusted EBITDA performance · Filed 12/06/2026
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.
Extended lock-up arrangements / CFO shares · Filed 04/08/2026
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.
Extended lock-up arrangements / COO shares · Filed 04/08/2026
During the last completed fiscal year, we were not a publicly traded company and did not have a compensation
Compensation committee interlocks / last completed fiscal year · Filed 12/06/2026
committee or any other committee serving a similar function.
Compensation committee interlocks / absence of compensation committee · Filed 12/06/2026
Musk has had primary responsibility for compensation-related
Executive compensation / management responsibility · Filed 12/06/2026
decisions; however, all equity awards were approved by the board.
Executive compensation / board approval of equity awards · Filed 12/06/2026
As a “controlled company,” we will rely upon the
Management / intended controlled-company exemption reliance · Filed 12/06/2026
exemption from Nasdaq’s and Nasdaq Texas’ requirement that we have a compensation and nominating committee
Management / compensation committee exemption · Filed 12/06/2026
that is composed entirely of independent directors with a committee charter that addresses all Nasdaq and Nasdaq
Management / committee independence requirements · Filed 12/06/2026
(the “Company”) elected Roelof Botha as an independent “Common Stock Director” (as defined in the Company’s Restated Certificate of Formation) to fill the existing vacancy on the Board, effective immediately, to serve until the Company’s next annual meeting of shareholders and until his successor has been duly elected and qualified or until such director’s earlier death, resignation, retirement, disqualification or removal.
Item 5.02 / effective independent director appointment · Filed 17/06/2026
The Board also appointed Mr. Botha to serve as a member of its Audit Committee, effective immediately.
Item 5.02 / effective audit committee appointment · Filed 17/06/2026
