SpaceX has filed a preliminary S-1 filing for its initial public offering. The rocket and satellite production business requires a huge investment in assets, and those assets depreciate.
To understand the SpaceX IPO, investors need clarity on the differences between net income and EBITDA.
Definitions: Net Income vs. EBITDA
Net income is defined as total revenue less expenses, and the earnings per share formula is:
- (Net income – preferred dividends) / (weighted average common shares outstanding)
EDITDA is defined as earnings before interest, taxes, depreciation, and amortization.
Depreciation expense is posted to recognize the decline in value of capital expenditures, including vehicles, machinery, and equipment. Amortization expense is recorded as intangible assets are used to produce revenue.
EBITDA adds back four categories of expenses to the net income calculation. If a business generates a profit, net income will be less than the EBITDA balance, because net income includes more expenses.
SpaceX: The Financial Impact
SpaceX reported $4.7 billion in 1st quarter ‘26 revenue with a $4.3 billion net loss.
The company reported adjusted EBITDA of over $1 billion during the quarter. EBITDA added back nearly $2.3 billion in depreciation and amortization expense.
To illustrate, analyst Patrick Boyle points out that Starlink satellites have a useful life of approximately five years. 10,280 Starlink satellites are operating in orbit, according to Space.com, and SpaceX plans to have a “megaconstellation” of over 40,000 satellites in space over time.
SpaceX must fully depreciate these assets and finance the production of new satellites. The company also invests billions into rocket design and manufacturing. As an example, a Falcon 9 reusable rocket costs over $70 million.
Investors must understand that SpaceX needs to make a massive investment in assets to generate revenue. The firm may have large differences between net income and EBITDA for years to come.
SpaceX, EBITDA and the Question Every Advisor Should Be Asking
Why the SpaceX IPO is a reminder that clients need more than headline numbers
SpaceX’s IPO filing gives investors a rare look inside one of the most ambitious private companies of the modern era. It also gives advisors a useful teaching moment.
Because this is not just a story about rockets, satellites, Elon Musk or the possibility of one of the largest public listings in market history. It is a story about how clients understand businesses — and, more importantly, how they can misunderstand them.
SpaceX is the kind of company clients instinctively want to believe in. It has the narrative. It has the founder mythology. It has the engineering achievement. It has a dominant satellite internet business in Starlink. It has the promise of reusable rockets, orbital infrastructure, AI-linked data capacity and a total addressable market that sounds almost too large to model conventionally.
But advisors know that narrative and numbers do not always travel at the same speed.
The company’s S-1 filing, published in May 2026, showed $18.7 billion of revenue in 2025, a net loss of $4.9 billion and adjusted EBITDA of $6.6 billion, according to industry reports reviewing the filing. In the first quarter of 2026, SpaceX reported $4.7 billion of revenue and a net loss of around $4.3 billion.
That gap between revenue momentum, EBITDA and net income is the point advisors should be focusing on.
For clients, the temptation will be obvious. SpaceX is growing. SpaceX is important. SpaceX is building the infrastructure of the future. Therefore, SpaceX must be a great investment.
Maybe it will be. Maybe it will not.
But the first serious question is not whether the story is exciting. It is whether investors understand what kind of business they are buying.
The EBITDA trap
EBITDA stands for earnings before interest, taxes, depreciation and amortization. It is a widely used measure because it attempts to show the operating earnings of a business before the impact of financing structure, tax treatment and certain non-cash charges.
In simple terms, EBITDA can be useful. It can help compare companies with different debt loads, tax positions or capital structures. It can show whether the underlying operations of a business are producing cash-like earnings before certain accounting expenses.
But EBITDA can also flatter capital-intensive businesses.
That matters enormously in the case of SpaceX.
Net income is the more complete bottom-line figure. It starts with revenue and subtracts expenses, including depreciation and amortization. For public company investors, net income also feeds into earnings per share, usually calculated as net income minus preferred dividends, divided by weighted average common shares outstanding.
EBITDA does something different. It adds back interest, taxes, depreciation and amortization. In a lightly capitalized software business, where assets are relatively modest and recurring revenue can scale quickly, that adjustment may be less controversial. In a business built on rockets, satellites, launch facilities, manufacturing capacity, infrastructure and engineering assets, it is far more material.
That is why SpaceX is such a useful case study.
SpaceX is not simply a technology platform. It is an asset-heavy industrial, aerospace, communications and infrastructure company. Its revenues depend on physical assets that are expensive to design, manufacture, launch, maintain, replace and insure. Those assets do not last forever. They depreciate. They need reinvestment. They create an ongoing capital burden that clients may not immediately appreciate when they see a positive adjusted EBITDA number.
Why depreciation matters here
Depreciation is not just an accounting technicality. It is the way companies recognize that physical assets lose value over time as they are used to generate revenue.
For SpaceX, that issue is central.
Starlink satellites, for example, have limited useful lives. They are launched, they operate, they generate revenue, and eventually they must be replaced. The company already has thousands of satellites in orbit, with ambitions for a far larger constellation over time. Space.com has reported more than 10,000 Starlink satellites in orbit, while SpaceX has discussed a much larger “megaconstellation” in the tens of thousands over time.
That creates a powerful business model, but also a demanding one.
The satellites are not a one-time expense. The network is not “built” and then simply harvested like a software subscription base. The infrastructure has to be refreshed, upgraded and expanded. Depreciation is the accounting recognition of that reality.
The same is true of rockets. Reusability changes the economics of launch, but it does not eliminate the cost of building, operating and replacing launch vehicles. Falcon 9 has transformed the launch market precisely because it can be reused, but the rocket is still a complex, expensive physical asset.
For clients, the danger is that EBITDA can make these businesses look more profitable than they are economically, especially if the recurring capital expenditure required to sustain the business is very high.
That does not mean EBITDA is useless. It means EBITDA has to be interpreted properly.
The advisor’s role: turn excitement into judgment
For RIAs, the SpaceX IPO should not be treated simply as another hot listing. It is a client education opportunity.
Clients may ask: “Should I buy SpaceX?”
A better first response is: “Let’s understand what the company has to earn, invest and reinvest to justify the valuation.”
That is where advisors can add real value.
SpaceX may well become one of the defining companies of the next decade. But even great companies can be poor investments if bought at the wrong price, with the wrong expectations or without understanding the cash demands of the business.
Advisors should help clients separate five things.
First, the quality of the company. SpaceX may be strategically extraordinary. It has a leading position in launch, satellite internet and potentially space-based infrastructure.
Second, the quality of the financial model. A company can have a strong competitive position and still require huge amounts of capital to sustain growth.
Third, the quality of reported earnings. Adjusted EBITDA can highlight operational momentum, but it may understate the economic impact of asset replacement and depreciation.
Fourth, the valuation. Even a brilliant business can disappoint investors if the IPO price assumes perfection.
Fifth, the role in a client portfolio. A speculative, high-growth, capital-intensive IPO is not the same thing as a core holding for a retiree drawing income.
This is the conversation clients need.
What advisors should say to clients
The right message is not anti-SpaceX. It is pro-discipline.
Advisors might frame it this way:
SpaceX is an exceptional company, but exceptional companies still need to be valued. The IPO filing shows a business with enormous revenue potential, but also substantial losses and very high capital intensity. Adjusted EBITDA may show progress in the operating model, but net income captures more of the real economic burden, including depreciation and amortization. For a company that depends on satellites, rockets and infrastructure, those charges matter.
That is simple, balanced and client-friendly.
It also avoids the two traps advisors should resist: dismissing the opportunity too quickly, or getting swept up in the story.
The better posture is analytical curiosity.
Clients do not need advisors to tell them that SpaceX is exciting. They already know that. They need advisors to explain what the financial statements are really saying.
The deeper client impact
The SpaceX filing also sits inside a broader issue for wealth management: clients are increasingly exposed to companies that blur the line between technology and infrastructure.
The next wave of market leaders may not look like the asset-light internet businesses of the last 20 years. AI data centers, semiconductor plants, satellite networks, robotics facilities, energy infrastructure and advanced manufacturing all require enormous capital investment.
That changes how advisors should talk about growth.
Growth is not automatically good if every dollar of revenue requires a heavy dollar of reinvestment. EBITDA is not automatically a clean proxy for economic value if depreciation reflects assets that must be replaced. And TAM slides are not the same as durable free cash flow.
This is especially important for clients who became accustomed to software-like margins, scalable platforms and recurring revenue models. SpaceX is different. It may have technology economics in parts of the business, but it also has industrial economics, aerospace economics and infrastructure economics.
That mixture makes it fascinating. It also makes it harder to analyze.
The portfolio question
For most clients, the key question is not whether SpaceX changes the world. It is whether buying the IPO improves the portfolio.
That depends on valuation, liquidity, risk tolerance, time horizon and concentration.
A young accumulation-stage client with high risk tolerance may view a small SpaceX allocation differently from a retired client who needs income and capital preservation. A tech-heavy client may already have significant exposure to similar long-duration growth assumptions through public equities, venture funds or private market vehicles. A client with concentrated exposure to Tesla, AI stocks or high-growth innovation themes may not need more Musk-linked or infrastructure-heavy risk.
Advisors should also be wary of clients confusing familiarity with suitability. SpaceX is a famous company. That does not make it a suitable investment for every household.
The right framework is position sizing, not prediction.
No advisor needs to declare with certainty whether SpaceX will be a winner or loser. The more useful conversation is: “What would happen to your plan if this investment fell 50%? What would happen if it doubled? How much exposure is enough to participate without putting the plan at risk?”
That is where planning earns its keep.
The bottom line
SpaceX’s IPO filing is more than a market event. It is a reminder that clients need help interpreting modern financial statements, especially when the company involved has a story powerful enough to overwhelm the numbers.
Adjusted EBITDA may show that parts of the business are producing impressive operating momentum. Net income tells another story, one that includes depreciation, amortization and the cost of building an asset-heavy enterprise at extraordinary scale.
For RIAs, that distinction matters.
The SpaceX conversation should not be reduced to hype or skepticism. It should be elevated into a more sophisticated discussion about capital intensity, reinvestment, earnings quality, valuation and client suitability.
That is the advisor’s advantage.
Markets sell stories. Advisors bring judgment.
