Space Exploration Technologies (NASDAQ: SPCX) reported its third-quarter earnings after the market closed on Tuesday, Oct. 20.
Ahead of the report, I laid out what I’d be looking for. And, frankly, the latest report was better than I expected in several key ways. Here’s a look at what the company’s Q3 earnings showed.
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SpaceX’s third-quarter results beat expectations
The headline numbers beat Wall Street’s targets on the top and bottom lines. SpaceX reported sales of $14.58 billion, well above the $12.72 billion consensus estimate. Diluted earnings were $0.35 per share, beating the $0.13 per share consensus estimate from analysts.
Going into the report, I wanted to see whether stronger sales were translating into better profit. It did.
Starlink grows while revenue per user improves
For Starlink, I was especially interested in how much each customer was paying. That figure moved in the right direction.
Average revenue per user, or ARPU, a key figure, rose to $69 a month from $66 last quarter. That’s a modest bump, but the trend is what is important. At least for now, it doesn’t appear that the company’s move into developed markets is affecting the global average.
Still, I wouldn’t declare the pricing question settled. It’s still pretty early innings, and as time goes on, I still think a higher mix of growth coming from developing nations will lower ARPU and the segment’s margins.
Overall, though, the results were strong for the segment, with sales up 69% and operating profit nearly doubling year over year.
Starship’s next test is full recovery
For the space business, growth didn’t look great. But that was expected as the company has turned its focus on delivering as many Starlink satellites into orbit as it can. The launch business doesn’t book any revenue from those. Of course, this dynamic is a big reason why the connectivity segment looks as good as it does.
I was especially interested in what management had to say about Starship, the company’s next-generation rocket, designed to be reusable and carry much larger payloads into orbit than the Falcon 9, SpaceX’s current workhorse.
The question was whether Starship is getting closer to becoming a reliable, reusable part of the company. What, if any, material updates did the top brass have for the rocket’s development timeline?
