CNBC’s Morgan Brennan says the most important number in SpaceX (NASDAQ:SPCX | SPCX Price Prediction) third-quarter results will come from Starlink. “The stock is up about 19% over the last three months, but one of the key numbers to watch in those results will be the performance of its Starlink satellite unit. This is its cash generating, big profit engine that’s enabling everything else, including the AI infrastructure build out.” Starlink is SpaceX’s satellite internet service. It delivers broadband from a constellation of low-orbit satellites to homes, airlines, ships and governments.
The second-quarter numbers support her view. Connectivity revenue came in at $4.3 billion, up 66% year over year, and the segment generated $1.7 billion in operating income. The AI segment, by comparison, posted a $1.3 billion operating loss, and total quarterly capital spending reached about $18.4 billion. Starlink subscribers doubled to 12.0 million, according to the company’s earnings release filed with the SEC.
SpaceX Shares Slid as the Controversy Spread
Shares traded at $148.90 as of 12:40 PM ET on Oct. 19, up 1.97% on the day. The stock has gained 20.09% since July 17, which lines up with Brennan’s about three-month figure. Over the past week, shares fell 8.41% while the Ukraine dispute played out.
Ukraine Dispute Puts Starlink’s Military Arm in Focus
Brennan described the dispute: “That division, though, has been a source of controversy in recent days, tied to the war in Ukraine after Ukraine’s president accused both the Trump administration [and] Elon Musk of throttling service, with Musk publicly saying Starshield, that is, the military grade is controlled by the US government.”
Starshield is the military-grade version of the network, built for government and national security customers. SpaceX holds more than $6 billion in multi-year Starshield contracts from the Space Force.
Ukraine’s president, Volodymyr Zelensky, said: “Of course, the message came from government. I don’t know from whom, what cabinet and etc. And I think it doesn’t work either way, but I don’t know really. But we think it’s not my opinion. It’s opinion of our generals, of our government. And of course, my opinion the same that it was the message from American government, government to limit the speed and technically SpaceX did it.” He said himself that he does not know who gave the order.
Denials and Conflicting Accounts Keep Piling Up
Scott Bessent, identified by CNBC as Treasury Secretary, said: “President Trump and Secretary Rubio have categorically said that no one on the Trump administration did that.”
Other outlets have reported different versions of events:
- UPI reported that Zelensky said Kyiv has “evidence” that the Starlink systems it uses were being limited.
- CNBC reported that Bessent warned Zelensky to “be very careful” about claims the U.S. is limited Starlink.
- Yahoo Finance reported that neither Trump nor Musk wants to own the decision.
- The Kyiv Independent, citing a Telegraph report, said Musk suggested Trump restrict Ukraine’s Starlink service.
- The New York Post reported that Ukraine’s Starshield access is being restored and that it wasn’t Trump who ordered it throttled.
These accounts contradict one another, and who ordered the slowdown is still in dispute. On the second-quarter call, management made no comments about Starlink service in Ukraine.
What to Listen for in SpaceX’s Third-Quarter Report
- Starlink growth: Last quarter brought more than 1.7 million net subscriber additions, with consumer ARPU flat at $66 per month.
- Enterprise and government momentum: That revenue line rose 108% to $1.806 billion, and management said it could eventually exceed the consumer business.
- Government orders: Any explanation of who controls Starshield service decisions, and how SpaceX handles instructions from government customers.
- International policy: Starlink operates in 167 markets, so its service policies abroad shape both regulatory standing and expansion.
- Dual-use exposure: Starlink serves civilians and militaries over the same network, which brings both contract opportunity and political scrutiny.
For more on where the network is headed, Elon Musk recently made a major claim about Starlink’s next-generation V3 satellites, which management says should add significant capacity.
Starlink is both the profit engine Brennan describes and the business at the center of the Ukraine dispute. Investors will want SpaceX to address both in its third-quarter report.